The prime market is the focus of those investing in property in Britain due to the return to recession, a new study has concluded.
Savills said the contracting economy has led to a hardening of yields in City of London offices, but leisure parks are very much on the slide. The prime hotels sector in London is one segment of the market listed as being notable for its stability, with non-dom investment in London hotels being a particularly strong element as this has doubled over the past five years.
With this concentrated on the top-end because of the security it offers investors, 53 per cent of leading London hotels are now in overseas ownership, compared with 42 per cent in 2007. However, the Savills report indicated the assumption made by some that the Olympics would bring a major retail boom in London was unfulfilled.
Overall UK retail spending in August was just 0.2 per cent up on the average for the month and in London itself, there was a clear east-west split during the Games period. On the one hand, the Westfield Stratford Shopping Centre adjacent to the Queen Elizabeth Olympic Park enjoyed ten per cent of its expected annual trade in just two weeks.
At the same time, however, the West End fared worse than usual in the opening week, although trade picked up in the second week of the Games and finished the month 0.8 per cent up on August 2011 - the first calendar month to see an improvement on the corresponding period in the previous year since September 2011.
Overall, the report noted retail demand for prime units in London continues to be strong, even with the recession to consider and Oxford Road, Bond Street and South Molton Street have all seen record rents this year.
The upbeat picture for UK retail property tallies with a recent Knight Frank report noting that in the third quarter of this year, the value of shopping centre property asset transactions was GBP 710 million, compared with GBP 390 million in the previous three months.
- Wednesday 17 October 2012