What were our key take aways?

London is still a prime city for investment and development with opportunities abound, and speakers and delegates were generally confident about the outlook despite all the challenges that currently exist. The fundamentals for London are still good, and investors and developers still want to be here.
However, significant changes were noted. Confidence in capital appreciation has gone, and investors do not make ’Net Asset Value’ – a key metric or KPI when discussing an investment. The rent roll and rental growth as well as EBITDA are now the critical success measures. REITs are therefore expected to become increasingly popular as a result.

Additionally, it is evident that landlords need to respond to the importance of income by switching from passive investors to operators in order to maximise the value from their investments, with retention of tenants critical. This can be achieved by providing excellent management through an in-house team or outsourcing this work across their whole portfolio to a firm that deliver. AI may assist in this and may take away some of the admin and allow facility teams to focus on building relationships with occupiers, understanding and delivering against their needs, and creating loyalty to a building.

Other interesting points were the suggestion that ’Property Templates’ should offer an opportunity to accelerate planning – making the whole process for residential developers quicker and thus a development more viable. This alongside the point that all sectors now offer opportunities for investors and developers and gone are the days when there were one or two sectors on which everyone focussed – retail and offices come to mind – and other sectors were not a significant element of a portfolio.

Finally, we should not forget the point made by our partner Mark Cunningham who spoke on the panel discussing concerning development viability and the race to delivery, about releasing surplus CIL funds for investment in training the next generation of Construction workers – desperately needed by the sector – to assist in getting NEWTs into training and employment and provide them with jobs for decades to come.Needless to say, we certainly came away feeling far more positive about London, and reflecting on the comment made that “Building a railway to nowhere creates a development opportunity” – advice that Government Ministers may wish to respond to!

Would you like to know more?

If you’d like to discuss the above, please speak to your usual Blick Rothenberg contact or Heather Powell using the form below.