There are 12 key reasons why London is more attractive to international capital than other markets. The mantra “why London” has been well rehearsed, but understanding these divers is crucial.

1. World Financial Centre

London’s position as a top financial centre brings with it real estate that is able to stand with global occupiers and strong covenants. While its exposure to financial and business services increases market volatility, its first ranking, which is not taken for granted, certainly channels global capital.

2. Liquidity

Even in the worst market conditions there is an exit strategy. There’s always a buyer for good deeds.

3. Stock

London is the second largest market in Europe and with a share replacement rate of around 2.7% per annum in the City of London, for example, there are quality stock options in new leases to high-calibre tenants or opportunities to inject funding for development.

4. Lease duration

The institutional nature of London’s real estate and offices in the United Kingdom, in particular, has created an investor-oriented investment market. Longer leases than the rest of the UK, usually, and on a “triple net” FRI basis ensure that a physical asset can be as “bonus as possible” with minimum fixed income guaranteed during the term of the lease , and in many cases guaranteed in better product than in another global MarkeTs.

5. Tenure

The guarantee of ownership may be granted by domestic investors, but it is not by foreign investors. Freeholdit is the most desired, but more experienced foreign investors are increasingly embracing the leasing structure of London’s office real estate.

6. Transparency

Independent research, data and scrutiny of the press industry, advisors and equity analysts serve to create a very transparent and relatively easy-to-understand market. The Jones Lang Lasalle Transparency Index ranked uk as the third most transparent real estate market in the world

7. Professional advice

Law firms and surveying practices operating in London often come with a platform that allows a consistent level of advice around the world. In this competitive market it also takes comfort that there is no monopolistic practice.

8. Taxes

UK Investment offers an investor a regulatory framework and a favorable tax regime for investors to foreign investors without barriers to real estate and the transfer of funds inside and outside the country.

9. Currency

The devaluation of sterling has made the price of real estate even more competitive and the investment of “riskier” currencies in sterling is a contemporary defensive game.

10. Familiarity

A “soft” factor perhaps, but very important. Of course, investors prefer to invest in areas where it is familiar to them. In London this has sometimes been described quite described as a “monopoly board mentality,” but it is actually derived from investors who already have strong cultural ties to London, as well as a practical knowledge of assets and strategy, either directly or from Contemporarys.

11. Education

For high net worth investors, family schooling has provided familiarity and the opportunity to buy residential properties. This fosters an understanding of London’s real estate practice that migrates to the commercial sector. Escalation in tuition fees has already brought more foreign students to our universities at the expense of national students. According to UCAS, there were 1.8 million full-time undergraduate students in higher education last year, of whom more than 104,000 were international.

12. Cultural and language

Multicultural London, quality of life and the English language make London an attractive place to invest capital and work.

source : cavendishinvestments.com