A forecast made on Tuesday by estate agents Knight Frank suggests that property prices in prime outer London will grow by nearly 4 per cent over the rest of 2021, double the rate of prices in prime central London.
This trend is partly driven by the return of overseas buyers to the London property scene who have traditionally invested in more central areas.
It may defy precedent, but is not predicted to be a pandemic-induced one-off. Knight Frank’s five-year forecast shows growth in prime outer London will remain steady at between 4 and 5 per cent.
“Prime outer London” is defined by Knight Frank as covering Barnes, Battersea, Canary Wharf, Chiswick, Clapham, Fulham, Hampstead, Richmond and Riverside.
By contrast, prime central London spans the City of Westminster and the Royal Borough of Kensington and Chelsea, and parts of the boroughs of Hammersmith and Fulham, and Camden.
There had been little in the data to foreshadow this sudden growth, said Henry Faun, partner at Knight Frank Middle East.
“There were some spikes in the market back in 2016 revolving around the EU referendum and Brexit, but since then things have been relatively steady,” he said. “The fluctuations were more in 2020 during lockdown.”
The same applies to offers accepted which, like prime prices, have gradually increased since March last year when the pandemic was declared, upending markets around the globe.
A very large proportion of the prime central areas, those around Hyde Park, for example, do rely on overseas buyers
Henry Faun,
Partner at Knight Frank Middle East
Yet the steady recovery from 2020’s initial Covid-induced shock has morphed into the “most active point in the market at any one time in the last five years”, said Mr Faun.
With many overseas buyers unable to fly to London owing to pandemic restrictions, domestic buyers have sustained the market for the past 18 months.
These buyers have acted like a centrifugal force, stretching London prime out of its traditional home within the SW1 postcode, and into areas of east and outer London not traditionally viewed as premium.
“A very large proportion of the prime central areas, those around Hyde Park, for example, do rely on overseas buyers,” said Mr Faun.
Their absence, along with the newly beefed up pound, has kept prices in and around Hyde Park “in check”.
Overseas buyers looking to London outer prime
The heat of pent-up overseas demand is now starting to be felt, however, and the inquiries aren’t solely about prime central London.
The trend was highlighted by Stuart Leslie, international sales and marketing director at property developer Barratt London.
“We have seen a lot of interest in east London, particularly from young professionals, in Canary Wharf – wanting to have a little bit better value for money than they will be getting in the west [of London] – and that value proposition has brought over [international] investors as well,” he said.
“So, whereas three or four years ago we wouldn’t have necessarily seen people from the Middle East investing in east London, now we’re seeing quite regularly both individuals and even family offices and institutional investments looking for real value for money and that strong rental demand, which is really driving the good rental yields” in the area.
Wherever this demand is focused, it is welcomed by Mr Faun, whose team has been increasingly busy.
“Prospective Middle Eastern buyers coming into the market are picking up the phone and sending through web inquiries or perhaps speaking with myself or the team in the Dubai office and saying: ‘We’re looking at buying real estate in London. Can you help us?’”
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Unresolved crisis
Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.
Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.
The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
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UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Mohammed Al Attas
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue
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How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
