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Jon moderated the panel discussion at this year’s Central London Seminar. Here’s a summary of his observations of the discussion.
17 October 2016 - With debates of the nature and meaning of Brexit in full swing, the outlook for property is clouded by political uncertainty. Given this background, the panel format of last week's Central London Office Market seminar seemed particularly appropriate. Steve Richards, political columnist and presenter of Radio 4’s Week in Westminster, gave the audience a low-down on the pressures facing Theresa May: her own commitment to controlling immigration, the pressure from businesses and her own backbenchers – as well as the press and the public. It was an essential guide to events in a period where politics will shape our market much more than we are used to. Gerard Grech, Tech City UK’s CEO, talked about how the government is listening to business and confirmed that despite some of the scare stories of the past few weeks, London still remains by far the most attractive place in Europe for the tech industries. Andrew Barnes, from JLL’s tenant representation team, confirmed that while there is a new caution in the air – with one of his clients reducing growth expectations by a few percentage points – no other location on the side of the channel, not even Berlin, can match London in this area. Morgan Stanley’s Bart Gysens, one of the most widely quoted property analysts in the industry, was somewhat downbeat on the rental and capital value growth prospects for the next 12 months. However, while confirming that loss of passporting rights would be a real issue for the banks, he added that there was no real potential of a mass exodus to the continent as labour and tax laws, as well as lack of capacity and skills, were too problematic for banks. In summary, the fundamentals of the London market may be strong – low vacancy, robust demand across a wide sectoral spectrum – but much depends on whether occupiers and investors keep making positive decisions throughout 2017. While there is unlikely to be a severe downturn, understanding the characteristics of submarkets and assets has never been so important. However, from my point of view, the likely slowdown in development will mean a further squeeze on vacancy within two to three years, potentially leading to a spike in rents when demand returns to the market – particularly if there is a benign Brexit settlement.
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