Despite the naysayers firmly believing the capital will suffer heavy losses in the wake of the Brexit proceedings; London is a global city that has interests and operations that come from far beyond the European Union and the commercial property market will no doubt prosper in the wake of Brexit.
£9.3 billion of overseas capital was invested in Central London’s offices last year and more than 80% of this total came from outside Europe. China and Hong Kong were the biggest investors to the tune of £2.9 billion – 60% more than the combined European investment.
Business continuity in London is not under threat in any way. Even with Brexit proceedings beginning; London will not be shunned by the European markets courtesy of the huge holdings the rest of the world has within the commercial property market – the capital is a hub of business for Europe and beyond.
As the value of the Pound Sterling falls; the market for commercial investment in London has opened up to a much wider market and this is reducing the importance of the EU as a source of finance. If anything, London could become a city that takes on a similar role to Switzerland – a safe haven for investment as an insurance policy of sorts.
Equally, London looks set to return to the halcyon days of the Commonwealth trade system as a huge amount of the capital’s business interests come from North America and Pacific Asia. Common ground such as language, law and business practices will make the move from EU regulation to a newer model much smoother.
London has long been a major player in global business with most of technological interests biased towards the US and the stock market trading across time zones – the lack of restriction in the capital will pay dividends moving forwards.
The biggest issue facing London will be the supply of commercial property within Central London as the rate of investment gathers speed. Property prices will start to rise at unsustainable levels unless the development of additional commercial property begins in the near future. The prices are unlikely to deter foreign investors as London’s stock continues to grow; but domestic businesses will find it progressively more difficult to access the capital.