Now is the Time to Capitalise
on London’s Buyers’ Market
Now is the Time to Capitalise on London‘s Buyers‘ Market
London is now experiencing a buyers’ market, and this coming year will yield excellent opportunities for investors with high levels of liquidity like Unica Capital.
BNP Paribas’s latest research has shown a repricing that has seen the commercial market drop by just over 17% since summer 2022, yet these prices – for assets most in demand by tenants – are now looking to have bottomed out ahead of almost every European capital, with lucrative rises now on the horizon for the London market.
A rare opportunity for UHNWIs
With the European Central Bank acting slower than the UK to raise interest rates (and likely slower to reduce them), and the feeling that these rates have now peaked in the UK, London is at a crucial point for investors looking to increase their holdings and be ahead of the curve.
It is a rare moment after 10 years of sellers holding the cards, and the next year is set to offer a unique opportunity, especially for all-equity buyers, to secure prime investments at a significantly reduced value – but acting now before rates do fall is key.
Significantly, one cohort is poised to reap the rewards without their need for expensive financing, and their ability to act quickly and flexibly – gaining a significant advantage over institutional investors. Ocorian found that 72% of family offices are looking to increase their property holdings with 30% looking to do this dramatically. In London Knight Frank recently reported that private investors with liquidity had been behind 44% of central London office investments in the last year (when the historic average is 36 %). In numbers, it represents £1.3 billion in transactions funded by family offices and UHNWIs – numbers that demonstrate increased confidence that London’s commercial property sector is ahead of other European capital cities at turning the pricing corner.
Maximising returns
Unica Capital has a track record of negotiating exceptional deal value and maximising ROI. All-equity acquisitions mean being a step ahead, securing deals on the most coveted properties that have all the assets needed to realise the highest returns, including a “green premium” for those that meet high sustainability ratings from the likes of BREEAM and LEED.
Interestingly of the recent increase in investment by those with cash to buy, £690 million went on assets that needed capital expenditure to bring them up to date with desired sustainability standards. Unica Capital knows this type of investment well and has demonstrated success by investing in capital improvements to reveal the true worth of properties – future-proofing them and elevating them to the standards being demanded.
Published: September 29 2023
Author: Byron Baciocchi