London is an international financial hub. There are many analysts who said London has been facing property shortages for many years, thus the price increase. However there are also many who are now not so sure after the Brexit decision. I read an article in NST today which said that Malaysian developers with exposure to London include SP Setia Bhd, Sime Darby Bhd, Eco World Development Group Bhd, Eco World International Bhd, Eastern & Oriental Bhd (E&O) and YTL Corp Bhd. The most famous one should be the one by SP Setia and Sime Darby; Battersea Power Station in London’s Nine Elms. There is nothing to worry about currently. According to Sime Darby Property managing director Datuk Jauhari Hamidi, the medium to longer term impact of Brexit on the Battersea development in London was anticipated to be minimal. He said, “The results from the referendum will not impact the viability of the Battersea Power Station project. We are confident the iconic development will continue to generate interest in the longer term” Full report in NST here.
Some additional information about The Battersea project. It is owned by SP Setia, Sime Darby Bhd and EPF on a (40:40:20) basis.Total gross development value for the project is £10 billion (RM55.5 billion). When it is completed in 8 years time (2025), the site will house 25,000 and will be creating over 20,000 jobs. Apple has agreed to lease a 500,000 sq ft office there. The report quoted real estate consultancy Knight Frank which released a report last week saying that the office take-up rate in Central London for Q4 2016 totalled 3.5 million sq ft and this is the highest since the third quarter of 2015. Knight Frank head of central London offices Stephen Clifton said: “We see London’s long-term growth story unchanged with the decision to leave the EU. He also shared that the fundamentals of the London office market are strong while in the investment market, overseas investors are showing a strong appetite for London offices.
I personally think the benefits of staying within the EU is higher than leaving. However, I agree that London will remain a top destination for investors, especially overseas ones. If you were to ask me to choose between London vs Australian cities, then London wins hands down. Yes, this is my personal opinion, biased because I am a UK graduate? Haha. This is my view about one Australian city, Perth. Anyway, the other reason is because its status as a financial hub could not be lost suddenly simply because some banks have indicated that they would have to relocate to other countries. International students would continue to further their studies in the UK. Even tourists would find London a metropolitan with lots more to see than just that “My father went to London and got me this lousy T-shirt.” Oh yeah, this is what the UK Prime Minister said recently, ” Theresa May: It will not be ‘half in, half out.’ I think they are ready to face this. The effects would be known only after both sides have started the negotiation for the exit. Cheers.
written on 29 Feb 2017
Next suggested article: Brexit effects? Exiting London, Entering EU (London is not EU….)