Growing confidence in London’s real estate increases appeal for Arab investors has been saved
Growing confidence in London’s real estate increases appeal for Arab investors
19 January, 2014- The London office development market remains at a four-year high with 9.7 million sq. ft. across 71 schemes now under construction, according to the winter edition of Deloitte London Office Crane Survey.
The survey, by Deloitte Real Estate, describes improving sentiment in London’s commercial office development market with 28 new starts recorded across the capital. 6.6 million sq. ft. is expected to be delivered next year. Importantly over two million sq ft is already leased to tenants prior to construction completion, showing encouraging occupier confidence.
Key office transactions involving Middle Eastern investors over 2013 included:
- St Martins Property Group, the real estate investment vehicle of the Kuwaiti Government, acquired 5 Canada Square, E14 for £383 million in January 2013 and More London, SE1 for £1.7 billion in December 2013;
- In September 2013, Ashby Capital, understood to be acting on behalf of a Saudi investor acquired 200 Aldersgate, EC1 for £225 million;
- In July 2013, The Shard opened in London, becoming Western Europe’s tallest building, in which the State of Qatar is the majority shareholder (95%);
- The acquisition of IBM’s London HQ in SE1 from Lord Sugars’ Amsprop in September 2013 by a Middle Eastern Investor for £120 million.
Robin Williamson, Real Estate industry leader at Deloitte Middle East, commented on the London Office Crane Survey: “2014 is currently set to deliver the largest amount of space into the Central London office market for 10 years. This is good news for the increasing number of companies looking for office space in a market where supply is reducing and shortages are appearing. However, we do not expect a significant oversupply of office space next year as there are strong indications that tenants will commit to this space during construction and so the amount being delivered into the market and available to lease will continue to reduce. Indeed, less than half the space completed over the last six months was available to let, with the rest let by tenants pre-completion.
“Interestingly, there are certain parallels between the London office development market and the various Middle Eastern office development markets, most notably that the ‘super prime space’ remains in demand with recovering rental rates.
“In contrast, the pre-letting of office accommodation in the Middle East region remains the exception and there is little sign this will change in the foreseeable future,” concluded Williamson.
To view the survey results, go to: http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/real-estate/deloitte-uk-london-office-crane-survey-winter-2013.pdf
Nadine El Hassan
Middle East Public Relations
Deloitte & Touche (M.E.)
Tel: +961 (0) 1 748444
Fax: +961 (0) 1 748999
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
About Deloitte & Touche (M.E.)
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).