London’s office market to attract £3.9bn from Middle East investors despite Covid challenges


Alice Haine
  • English
  • Arabic

London’s office investment market will attract £46 billion ($62.9bn) in capital this year as investors look beyond the Covid-19 pandemic and focus on the strengths of the UK capital’s commercial property sector, according to Knight Frank.

The top three locations “with the highest amount of dry power capital” earmarked to buy commercial assets in London in 2021 include Greater China (China, Hong Kong and Taiwan) at £12.6bn, Singapore with more than £5bn and the Middle East with £3.9bn, according to the property consultancy’s annual London report.

“Despite the UK’s lockdown restrictions and the impact on global travel due to the pandemic, London’s appeal remains unwavering to global investors,” said Faisal Durrani, head of London commercial research at Knight Frank.

“This continues to be the case for Middle East investors who have spent £16.4bn over the last 10 years on London offices, accounting for just over 10 per cent of all London office investment.”

Britain saw the biggest rise in vacant shops in over two decades late last year, and the sharpest increase in empty offices since the global financial crisis of 2008-09, according to a quarterly study by the Royal Institution of Chartered Surveyors (RICS).

The RICS study showed a swing in demand towards industrial space - such as warehouses to service booming online shopping - and away from traditional retail and offices.

Forty-five per cent of working adults were working from home in the third week of January, according to the Office for National Statistics, the highest since June, after new restrictions were enforced across the country at the start of January.

RICS said office demand was weaker in London than elsewhere, especially away from prime locations, and surveyors do not expect any rise in office or retail rents for the next year at least.

However, Knight Frank said a development shortfall in London’s office investment market will spur future rental growth despite the pandemic-induced surge in remote working.

Only 3.2 million square feet of 26.6 million square feet of pipeline office developments tracked by Knight Frank will be delivered to the market by 2024.

At the same time, the long-run annual average take-up of new and refurbished space is 5.3 million square feet, said Knight Frank, with the supply and demand imbalance putting upward pressure on rents in the longer term.

London’s reputation as a safe haven and leading global city is also still an attraction for international investors, particularly as returns are attractive compared with other European and global gateway cities. Removal of the ‘no deal Brexit’ risk premium will be a further catalyst for capital markets activity, Knight Frank said.

“The pandemic will likely go down as one of the greatest disruptors commercial property has ever seen, however we may be on the cusp of a post-pandemic road to recovery for real estate,” said Mr Durrani.

The pandemic has also accelerated the focus on high-quality offices, with businesses increasingly choosing modern workplaces that offer amenities, wellbeing and sustainability. Knight Frank expects demand for prime offices to intensify, relative to poorer quality buildings, creating a greater disparity between the prime and secondary markets.

London also boasts the highest concentration of green buildings globally, at almost 3,000, offering opportunities for “green” investors and those looking to rebalance their carbon targets.

“Once you factor in a requirement for buildings to meet increasingly ambitious ESG [Environmental, Social, and Governance] credentials, it is clear the volume of office space available to satisfy demand for prime office space is limited," Mr Durrani said.

In Britain's residential sector, house prices fell in January for the first time since the introduction of a stamp duty holiday, according to the Nationwide Building Society, indicating that a mini market boom might be over as the end of the tax break approaches.

The average price of a house fell by 0.3 per cent from December to £229,748.

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Transmission: 6-speed automatic

 

Power: 110 horsepower 

 

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Pharaoh's curse

British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.

A cryptocurrency primer for beginners

Cryptocurrency Investing  for Dummies – by Kiana Danial 

There are several primers for investing in cryptocurrencies available online, including e-books written by people whose credentials fall apart on the second page of your preferred search engine. 

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Where to buy and try:

Nutritional yeast

DesertCart

Organic Foods & Café

Bulletproof coffee

Wild & The Moon

Amasake

Comptoir 102

DesertCart

Organic Foods & Café

Charcoal drinks and dishes

Various juice bars, including Comptoir 102

Bridgewater Tavern

3 Fils

Jackfruit

Supermarkets across the UAE

LIVING IN...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

If you go

The flights
Etihad (etihad.com) flies from Abu Dhabi to Luang Prabang via Bangkok, with a return flight from Chiang Rai via Bangkok for about Dh3,000, including taxes. Emirates and Thai Airways cover the same route, also via Bangkok in both directions, from about Dh2,700.
The cruise
The Gypsy by Mekong Kingdoms has two cruising options: a three-night, four-day trip upstream cruise or a two-night, three-day downstream journey, from US$5,940 (Dh21,814), including meals, selected drinks, excursions and transfers.
The hotels
Accommodation is available in Luang Prabang at the Avani, from $290 (Dh1,065) per night, and at Anantara Golden Triangle Elephant Camp and Resort from $1,080 (Dh3,967) per night, including meals, an activity and transfers.

THREE
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Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

WRESTLING HIGHLIGHTS
WHAT IS A BLACK HOLE?

1. Black holes are objects whose gravity is so strong not even light can escape their pull

2. They can be created when massive stars collapse under their own weight

3. Large black holes can also be formed when smaller ones collide and merge

4. The biggest black holes lurk at the centre of many galaxies, including our own

5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed

AUSTRALIA SQUAD

Tim Paine (captain), Sean Abbott, Pat Cummins, Cameron Green, Marcus Harris, Josh Hazlewood, Travis Head, Moises Henriques, Marnus Labuschagne, Nathan Lyon, Michael Neser, James Pattinson, Will Pucovski, Steve Smith, Mitchell Starc, Mitchell Swepson, Matthew Wade, David Warner

UAE currency: the story behind the money in your pockets
How to wear a kandura

Dos

  • Wear the right fabric for the right season and occasion 
  • Always ask for the dress code if you don’t know
  • Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work 
  • Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts 

  • Wear hamdania for work, always wear a ghutra and agal 
  • Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The specs

Engine: 1.5-litre turbo

Power: 181hp

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Transmission: 6-speed automatic

Starting price: Dh79,000

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Global Fungi Facts

• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil

Champions parade (UAE timings)

7pm Gates open

8pm Deansgate stage showing starts

9pm Parade starts at Manchester Cathedral

9.45pm Parade ends at Peter Street

10pm City players on stage

11pm event ends

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UAE currency: the story behind the money in your pockets
Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
While you're here
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What to watch out for:

Algae, waste coffee grounds and orange peels will be used in the pavilion's walls and gangways

The hulls of three ships will be used for the roof

The hulls will painted to make the largest Italian tricolour in the country’s history

Several pillars more than 20 metres high will support the structure

Roughly 15 tonnes of steel will be used

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