The Top Cities in the World for Real Estate Investment: Why Old Beats New

The Top Cities in the World for Real Estate Investment: Why Old Beats New

The Top Cities in the World
for Real Estate Investment:
Why Old Beats New

If you look at commercial real estate markets from a pure price perspective, one city stands out: London. According to Savills, the West End of London commands the highest annual cost per square foot – around US$283, well above the second-placed Hong Kong.
So why is London the best city in the world for commercial real estate investment?

The answer lies in the age of the buildings and the capacity for London itself to keep growing. It is a lesson we can take from the UK’s capital and apply all over the world.

The Unique Appeal of Historical Buildings

The most expensive buildings in London are not the newer builds – they are the beautiful heritage properties, which exude an old-world glamour modern boxes of glass never will. This allure is complemented by their rarity: It is impossible for a developer to build a new old building. As a result, its existing old buildings become even more valuable, as they are so rare.

These structures, often meticulously preserved, provide a tangible connection to the past, something that modern buildings rarely achieve. And the world’s best organisations love the glamour and status that leasing office space in these buildings give them.

The investment potential of heritage properties

For all of that glamour, a lot of heritage buildings all over the world are in a poor state. Even in London there exists far too many incredible properties that can’t be rented to the best tenants because their beautiful exteriors hide decaying interiors without the modern conveniences needed for the type of office tenant. (Think showers, good internet, and bike parking.) Too many owners don’t have the ability to really bring these buildings to their full potential.

This presents a huge opportunity for investors willing to put some time and capital into making a neglected treasure shine again.

Why you need more than old buildings

London is far more than just a collection of heritage buildings: It is a living and breathing megacity with a bustling economy able to rent offices in those beautiful older buildings.

This is a crucial factor for real estate investors to consider. Are people still going to be working here when my grandkids inherit this generational investment? London retains the ability to grow thanks to its massive commuting belt and connection to the continent. You can also trust that your investment is unlikely to be put in jeopardy by a sudden political swing – nowhere has enmeshed the common law right to private property more than England. This sets London apart from cities in China where there is a lot of economic activity but less of a long-term guarantee of political stability.

Applying the Lessons of London to other cities

London is not alone as an incredible place to invest. The lessons of the city can be applied elsewhere.

Paris: Beautiful heritage, huge commuter belt

Paris has long been paired with London, and for good reason. While smaller it offers an incredible range of beautiful heritage property that the world’s best brands love to have offices in. And like London it has a gigantic commuter belt meaning the demand for that property can keep on growing and growing.

Geneva: Limited Space, High Value

Geneva, like London, offers a constrained commercial real estate market that is ripe for investment. The city’s picturesque setting and historical significance make its old buildings highly attractive to investors. Geneva’s limited space ensures that demand remains high, driving up property values. Investors looking to capitalise on this should focus on properties that combine historical charm with modern functionality.

Conclusion: Building Generational Wealth

Investing in cities with historical buildings and limited expansion opportunities is, not just about immediate returns; it’s also about building generational wealth, which is our key goal at Unica. These investments are long-term plays that provide sustained value over time, not quick bursts of money. Heritage properties, particularly in cities with strict building regulations and spatial constraints, are less likely to face market saturation. This ensures a steady appreciation in value, making them ideal for investors looking to create lasting financial legacies.

Published: July 22 2024
Author: Chloé Roussel

UK Commercial Property Sector Poised For Rebound

UK Commercial Property Sector Poised for Rebound

UK Commercial
Property Sector
Poised for Rebound

The UK commercial property sector is on the cusp of significant transformation. Amid shifting economic currents, evolving work patterns and Government EPC regulations coming into force, the market for best-in-class assets shows signs of strength and growing potential.

As interest rates stabilise and the economy navigates post-pandemic realities, investors are increasingly optimistic about the future. With prices alluringly low, the time seems opportune, and for many of the UK’s large commercial investors these green shoots are beginning to drive active investment. With the likes of GPE (Great Portland) announcing a rights issue to raise £350m to invest in the market now, the signs are that investors are beginning to realise that the very best assets in the most central locations are about to see a fresh wave of investor attention.

Stabilising values and emerging opportunities

Despite the challenges posed by fluctuating office demand and regulatory changes, the UK commercial property sector is demonstrating resilience. According to recent insights, the sector’s values are stabilising, with indications that the market may be bottoming out. This bottoming out is crucial as it signals a potential turning point, providing a foundation for future growth.

Industry leaders, such as those at Blackstone, have expressed confidence that the commercial real estate market is finding its footing. With values beginning to steady, investors are reassessing opportunities, particularly in sectors poised for growth, despite broader market uncertainties.

However, while the City thrived, the West End experienced a small downturn in activity, this has been attributed to a dwindling supply. Upon closer examination of the West End, each of its submarkets experienced a surge in Grade A space, averaging a remarkable 104% increase in Grade A, compared to Q4 2022, notably with a threefold expansion in King’s Cross-Euston.

The office sector: adapting to new norms

One of the most debated aspects of the commercial property market is the office sector. The pandemic accelerated the adoption of work-from-home (WFH) policies, leading to a re-evaluation of office space needs. Although this shift posed challenges, it also opened up new possibilities for flexible workspaces and hybrid models.

British Land’s CFO Bhavesh Mistry, quoted by Reuters, reported that across their office portfolio occupancy from Tuesday to Thursday at least is at – or above – pre-pandemic levels. However, demand seems focused on prime central London locations, and superior commercial offerings, with the landlord shedding assets in Paddington, Euston and Canary Wharf.

Landlords and property managers are increasingly focused on enhancing building amenities, improving digital infrastructure, and promoting environmentally sustainable practices to secure the best tenancies. Such adaptations are essential as companies seek to balance remote work with in-office collaboration, driving demand for versatile and innovative office environments. However, with sustainability it is not just meeting a tenant’s expectations that landlords need to concern themselves with – it will very soon be part of Government regulation.

Sustainability and regulatory compliance

A critical factor shaping the UK commercial property sector is the need for compliance with new energy performance certificate (EPC) regulations, with buildings requiring a rating of E or higher.

Whereas previously lower performing assets might have been unappealing to some tenants, requiring landlords to reduce rents to make them attractive, now lack of sustainability compliance will make these assets plummet in value if left as is.

The need for landlords to upgrade older properties to meet stringent energy efficiency standards comes at a cost, but it also presents an opportunity for owners to enhance the appeal and value of their assets – or for buyers to buy low and invest in improvements. Last year Blick Rothenberg found in an annual survey that only 80% or landlords were aware of the need for compliance. This, in the last year, has increased to 100%. Previously where 80% of those surveyed in 2023 didn’t know the cost of improvements needed; this year just 10% are still unsure.

Investment insights and market sentiment

The overall sentiment among investors in the UK commercial property market is cautiously optimistic. With interest rates steadying the cost of borrowing is becoming more predictable, which is essential for planning and investment decisions. This stability is likely to encourage a renewed flow of capital into the sector, with investors seeking to capitalise on emerging opportunities in office space, retail, and industrial properties.

Additionally, prime central London remains a focal point for investment. The city’s diverse economy, robust infrastructure, and global connectivity continue to attract both domestic and international investors. As the market adjusts to new dynamics, London’s commercial property sector is well-positioned to lead the way in recovery and growth.

Published: June 19 2024
Author: Byron Baciocchi

Investing for the next century

Investing for the next century

Investing for the
next century

London property has held value for longer than many financial services have existed. It will continue to do so.

Far too much investment discourse focuses on the short term. At Unica Capital, we create investment management strategies that last for decades, and that create generational and family wealth. The best way to read that far into the future is not to chase the latest investment fad – but to look into the past.

It may seem counterintuitive, but explaining the appeal of London property investing is best done by referencing a theory called “The Lindy Effect”.

It holds, loosely, that the longer a non-perishable good like an institution or cultural product has been active, the longer it will survive.

A book that has been in print for 100 years, like The Great Gatsby, is far more likely to be in print for another 100 years, than a book that came out three months ago. A restaurant active for decades is more likely to survive several more decades unlike the new coffee place that opened last week. Unlike humans, these non-perishable goods get stronger with time.

Applying this wisdom to Central London shows you just how valuable property is here.

People have been living near the Thames for millennia. And while the city has changed massively as it has grown, the desire to live and work in proximity to the City is as strong as ever. When Sir Richard Grosvenor obtained a licence to develop Grosvenor Square in Mayfair in 1710 he knew the area was desirable thanks to its position in the developing metropolis. It was, and it still is 314 years later.

And it isn’t alone. Wardour Street in Soho has been an important thoroughfare since the first maps of London were printed. The streets of Westminster had already been fantastically fashionable for centuries when Virginia Woolf wrote about Mrs. Dalloway walking through them in 1925. People don’t just want to work in central London – they want to shop here, eat here, drink here, walk around here, and live here.

Compare this to NFTs. For a few years they had a lot of buzz and consequently some value. Now researchers suggest about 95% of them hold no value at all.

Of course, London isn’t alone as a city with essentially timeless value. Across Europe there are areas with natural beauty or built amenities that people have been placing great value on for centuries – from larger cities like Geneva and Monaco to small towns. Like Gstaad. These are the places where we focus our investment at Unica Capital.

But it’s worth noting that not all London property is built the same, even in seemingly-prime areas.

Canary Wharf is an example of how the Lindy Effect can devalue newer areas. It may have great transport connections and for a while quite a lot of buzz, but in London terms it is incredibly young – the first building was completed in 1992. We’re now seeing that it has not managed to build real amenity value or staying power in those 32 years. Vacancy rates in the London Docklands area are expected to hit 16.6% by Q4 2024. This doesn’t mean Canary Wharf is doomed – but we are simply not seeing that kind of fallback in prime London locations that are more central.

We’re also not seeing it in buildings that embody the old-world London of prior centuries – the heritage-listed property we seek at Unica Capital.

You can apply the Lindy Effect to architectural styles as well as locations. Concrete and glass towers that were all the rage in the 1970s are often losing value now, while classic buildings in Mayfair made up of distinctive red brick with mansard roofs soar – especially when these classic facades are complimented by modern interiors. And since many of those modernist towers have some level of heritage protection, it’s not like you can just unlock the underlying value of the land beneath it: You could well be stuck with something that many people find ugly and little chance of getting planning permission to enhance the property.

Even if you can get planning permission to demolish and start again, doing so will imperil any investment strategy’s environmental credentials. Building a new building involves a lot of “embedded carbon” – emissions from things like steel and construction that simply can’t be avoided when starting from scratch. Offsetting these emissions is possible, but expensive and difficult.

Of course, old buildings don’t retain value without the work of active conservation, which is a huge part of what we do at Unica Capital.

Even the most beautiful buildings lose something if left empty. Indeed, the so-called “most expensive house in the UK” in Knightsbridge currently needs serious renovations after laying vacant for a decade. The right tenants, ones that will sustain your investment and keep the space’s feeling alive, will not settle on a building if it is derelict or dated inside. And they will want modern office conveniences: Showers, kitchens, super-fast WiFi, and bike-parking.

And retaining those environmental credentials will mean making your building energy efficient. This isn’t always simple; but it is far better for the planet than tearing the building down and starting again.

So, you can’t just buy a stake in history and expect to leave it in place to age well. Buildings are not wine. But if you’re willing to do some work to keep it classic on the outside but modern on the inside, it will retain value not just for decades, but for centuries.

Published: May 1 2024
Author: Byron Baciocchi

Unica Capital Expands Its Swiss Footprint: Acquires Prestigious and Rare Chalet in Gstaad

Unica Capital Expands Its Swiss Footprint: Acquires Prestigious and Rare Chalet in Gstaad

Unica Capital Expands
Its Swiss Footprint:
Acquires Prestigious
and Rare Chalet in Gstaad

Gstaad luxury chalet swiss property developer

Unica Capital, renowned for its robust real estate portfolio across London, Switzerland, and Monaco, proudly announces its latest acquisition in the desirable village of Gstaad.

Nestled amidst the beautiful landscapes of Gstaad, famous for its alpine charm and upscale lifestyle, the newly acquired chalet and surrounding grounds occupy over 6,000 square meters. With properties of this quality in short supply, this is another remarkable acquisition for Unica Capital. Set to undergo extensive refurbishments, the chalet will be restored to its prime.

This acquisition seamlessly aligns with Unica Capital’s existing properties in Switzerland, which include chalets in the upscale village of Crans-Montana and luxury villas on the shores of Lake Geneva.

Gstaad, situated in the Berner Oberland, boasts a vast ski area in the Alps with 220 km (137 mi) of slopes. The village’s charming promenade, lined with shops, restaurants, art galleries, and hotels, adds to its appeal. Known for its walking and hiking trails, Gstaad attracts visitors year-round, including famous part-time residents and vacationers like Valentino Garavani, Prince Albert II, Madonna, and Roman Polanski.

Unica Capital’s vision for the newly acquired chalet includes meticulous refurbishments, ensuring modern amenities and exceptional finishes that meet Gstaad’s prestigious ambience.

Stay tuned for updates as we embark on this exciting journey of enhancing luxury living in Gstaad.

Published: April 18 2024
Author: Ricardo Gato

How to tackle the commercial EPC time bomb

How to tackle the commercial EPC time bomb

How to tackle the
commercial EPC
time bomb

Remit Consulting’s latest figures spell positive reading for the commercial property sector; UK office occupancy levels have hit the highest weekly average since the start of the pandemic.

More and more people are returning to the office which is fantastic news for investors and developers. However, the ticking EPC timebomb presents a major challenge for existing stock and if not defused, we simply might not have a space for all these people.

In short, an Energy Performance Certificate (EPC) rates how energy efficient a building is using a grading system from A to G (with ‘A’ the most efficient grade).

As of April 2023, commercial buildings must meet the minimum EPC rating of ‘E’ or above otherwise they are prohibited from being sold or leased. This is only the first hurdle of a long and challenging race. Before 2027, commercial buildings must have an EPC rating of a ‘C’ or above and this will ramp up to ‘B’ or above in 2030.

Research from FORE Partnership estimates that there are around 6,500 office buildings above 20,000 sq ft in London that are in desperate need of retrofit to meet these EPC regulations, with only around 1-1.5% of existing commercial buildings being retrofitted. Meanwhile research from Savills highlights that over 1 billion sq ft across the UK is below the required EPC ‘B’ rating, further highlighting the size of the challenge at hand.

However, this presents excellent opportunities for savvy hands-on investors and developers to acquire, retrofit and then attract the best commercial occupiers.

Improvements to wall and roof insulation will make a major difference, helping to manage temperatures and reduce heat loss, while replacing inefficient lighting with energy efficient LED options and installing occupancy sensors or timers can help control usage. Another aspect to consider is the installation of solar panels on the roof. This can help generate an electric source resulting in less electricity being used from the grid.

However, all of this doesn’t come cheap. The cost of upgrading an existing building from how it is today to 2030 standards is estimated to be £40 per sq ft – not including normal refurbishment costs, which is more than some buildings can command in rent alone.

To support the retrofitting of existing commercial buildings, investors can access incentives and funding from the UK government. In addition, there are many specialist lenders in the market that offer green loans to finance this area of refurbishment.

With tightening deadlines looming and taking into account the fact that many buildings will need to be made vacant for necessary works to take place, opportunistic investors should be keeping an ear to the ground now for those seeking to offload discounted buildings before they become stranded EPC-failing assets. In this landscape, those with in-house development experience will come into their own.

Published: April 11 2024
Author: Byron Baciocchi

The Rise of Soho, London’s Choice for Prime Office Space

The Rise of Soho, London’s Choice for Prime Office Space

The Rise of Soho,
London‘s Choice for
Prime Office Space

Tucked away in the heart of London’s bustling West End lies Soho, a neighbourhood brimming with character, creativity, and opportunity. What was once a vibrant hub for artists, writers, and musicians has now emerged as one of the most sought after locations for businesses seeking prime office space in the capital.

A Historic Haven of Creativity:
In the heart of London’s West End, lies Soho, an area deeply rooted in creativity and entertainment. Starting life as a royal park and developed by Henry VIII, Soho blossomed into a vibrant neighbourhood attracting artists, writers, and musicians seeking inspiration and community. Visionaries like Arthur Lasenby Liberty (the founder of Liberty) and property investment tycoon Paul Raymond left an indelible mark on Soho’s landscape, laying the foundation for its transformation into a dynamic commercial district.

Iconic Buildings and Cultural Landmarks:
RSoho’s streets are filled with iconic buildings and cultural landmarks that speak to its rich heritage. From the spire of St. Anne’s Church to the bustling market stalls of Berwick Street (one of London’s oldest markets dating back to 1778), the area has a timeless charm. After dark Soho plays host to legendary music venues, such as the world famous Ronnie Scott’s Jazz Club and the iconic Marquee Club, where acts like The Rolling Stones and David Bowie played.

Prime Office Space in the Heart of London:
Strategically located in the heart of London, Soho offers unrivalled connectivity and accessibility. With tube stations like Oxford Circus and Tottenham Court Road nearby, commuting to and from Soho is convenient and efficient. Its central location also provides easy access to key London landmarks and attractions, making it an ideal destination for client meetings and networking events.

Amenities and Opportunities:
Beyond its office spaces, Soho boasts a wealth of amenities that cater to the needs of modern businesses. Colleagues can meet clients in trendy cafes, explore the delights of Chinatown or even eat in world-class restaurants. And after work they can enjoy the vibrant entertainment venues that line the streets of Soho, all of which offer endless opportunities for team building and client engagement. From the historic charm of Carnaby Street to the trendy vibes of Old Compton Street, Soho’s streets are alive with energy and opportunity.

Exploring Soho’s Best Streets and Notable Residents:
If you wander through Soho’s streets, you’ll encounter a tapestry of history and culture woven into its fabric. Poland Street, with its storied past and iconic establishments like The Ivy Soho Brasserie, offers a glimpse into Soho’s illustrious history. Meanwhile, Wardour Street bustles with activity, serving as a hub for businesses and creative professionals alike. From literary giants like William Blake to modern-day entrepreneurs, Soho has been home to a diverse array of notable residents who have left their mark on the neighbourhood.

Business Potential in Soho:
With its rich history, prime location, and vibrant community, Soho is the premier choice for businesses seeking prime office space in London. As the UK briefly dipped into recession last year, it is communities like Soho that are driving the UK economy forward.

Real estate investment in Soho continues to thrive, unaffected by uncertainties, emphasising the stability and resilience inherent in the capital’s property market. And is why Unica Capital continues to invest in properties within the area on vibrant streets such as Wardour Street and Poland Streets which blend historic charm with modern amenities, providing prime office spaces tailored to the needs of today’s businesses. These streets are full of historic charm. Poland Street, is famously where poets such as Percy Bysshe Shelley and William Blake once resided, and is a contrast to the vibrant energy of Wardour Street (named after Sir Edward Wardour, an official at the Exchequer). Soho offers a diverse array of options for businesses seeking a prestigious address.

Published: March 18 2024
Author: Ricardo Gato

How Planning Changes for Commercial and Residential Properties can affect development in London

How Planning Changes for Commercial and Residential Properties can affect development in London

How Planning Changes
for Commercial and
Residential Properties can
affect development in London

Easing of Planning for Brownfield and Change of Use for Commercial and Residential Properties

In our ever-evolving urban landscape, the regeneration of our town centres remains paramount. It’s no secret that many high streets across the UK have struggled, with buildings sitting vacant for extended periods. In a bid to rejuvenate England’s urban landscapes and address the pressing housing shortage, the government has announced a series of measures aimed at streamlining planning regulations and promoting the conversion of commercial spaces into residential properties.

This significant shift in planning policies is aimed at breathing new life into urban spaces. With the easing of restrictions on brownfield development and conversion of commercial properties into vibrant residential hubs, property investment specialists and real estate investment trusts (REITs) are poised to play a pivotal role in reshaping our cities.

The recent introduction of flexibilities in permitted development rights marks a crucial milestone. Now, developers have greater freedom to convert underutilised commercial buildings into much-needed residential units. This shift not only addresses the pressing demand for housing but also injects vitality into dormant urban areas. Under these new measures, buildings classified under Use Class E, including shops, offices, and gyms, can be converted into residential properties (Use Class C3) without the need for full planning permission.

Regeneration and Adaptation:
Robert Jenrick, the former Secretary of State for Housing, Communities, and Local Government, emphasises that these regulatory changes are geared towards revitalising town centres and addressing the housing crisis. By providing flexibility in land use and encouraging the conversion of unused commercial spaces into homes, the government aims to create vibrant, adaptable urban environments for the future.

But this isn’t just about bolstering the housing market; it’s about building dynamic, inclusive communities. Creative reuse of commerical space offers opportunities for diverse leisure activities, enhancing the quality of life for residents and visitors alike.

Consider iconic London landmarks like Battersea Power Station and the BBC Television Centre, which have both undergone remarkable transformations, providing modern commercial and residential spaces, signalling the dawn of a new era in urban regeneration. There was news last week that the BT Tower will undergo an extensivea extensive redevelopment in order to repurpose this iconic London landmark into a hotel. These success stories underscore the immense potential inherent in repurposing existing structures for the benefit of the community.

Initiatives like the London Plan Review and consultations on strengthening planning policy for brownfield development are driving forward-thinking strategies to ensure sustainable growth. By prioritising brownfield developments and encouraging flexibility in policy implementation, policy makers are laying the groundwork for a more resilient and vibrant urban landscape.

However, it’s essential to strike a balance between progress and preservation. Westminster City Council announced proposals this week that see a ‘retrofit first’ approach to redevelopment. The council said it will promote retrofitting to cut down on carbon emissions, aiming for a minimum utilisation of 50 percent of existing buildings. This approach mirrors the strategy employed by Unica Capital in property investment. It not only aligns with our ESG objectives but also preserves the architectural integrity of the communities where we invest.

While these changes present exciting opportunities for property investors and developers, ensuring quality, safety, and adherence to standards remains paramount. Responsible development practices are key to ensuring that our urban spaces thrive for generations to come.

Looking Ahead:
As these planning changes take effect, it’s essential to monitor their impact on urban development and housing provision. The conversion of commercial properties into residential units presents opportunities for property investment in urban regeneration. However, these changes also necessitate careful planning and consideration of long-term implications for communities and urban landscapes.

Government Initiatives:
In addition to the regulatory changes, the government has unveiled a suite of initiatives aimed at supporting high street regeneration and fostering economic recovery. From financial assistance to regulatory relaxations for businesses, these measures complement the broader goal of creating vibrant, inclusive urban environments.

As England embarks on this journey of urban renewal and housing provision, collaboration between policymakers, industry professionals, and local communities will be key to achieving sustainable, inclusive urban environments for generations to come.

Published: March 7 2024
Author: Chloe Roussel

How does a recession affect property investment?

How does a recession affect property investment?

How does a recession
affect property investment?

As the UK economy officially enters a recession, the impact on the property market raises questions and opportunities for investors. We take a look at how investors can leverage the market’s nuances to secure profitable investments with long-term returns.

The latest recession
“The UK economy has officially entered recession, figures show,” reports Sky News. This downturn presents both challenges and unique opportunities for property investors.

The current recession echoes historical trends, but not all recessions are created equal. While economic downturns typically lead to financial challenges for individuals and businesses, they also present unique opportunities for proactive property investors and REITs. Understanding the dynamics of the market is crucial for maximising returns and minimising risks.

One of the primary impacts of a recession in the UK, is the fluctuation in property prices on the housing market. Unica Capital believe that a recession is not necessarily all doom and gloom. Pettyson Estate agents agree, “Entering a recession isn’t automatically bad for everybody.” The last major recession, commonly referred to as the Great Recession of 2008-09, saw varying effects across different sectors and locations. Similarly, the 2020 recession, driven by the unprecedented nature of the COVID-19 pandemic, brought its own set of challenges and opportunities. For investors adopting a long-term view of the market, the most pivotal part of any recession is the rate of recovery.

Opportunities for investors
Gladfish, highlights the potential for investors to capitalise on the market’s nuances. “Global economic recessions can bring about significant challenges, but they also present unique opportunities for property investors in the UK,” notes the article. In particular, London has performed far better than any major cities in the US and Europe since the end of the COVID-19 pandemic. And is in a far better position to recover from a UK and wider global recession. By diversifying portfolios and focusing on high-demand areas, and real estate investments with refurbishment or growth opportunities, investors can mitigate risks and capitalise on the market’s potential.

One significant opportunity during a recession is the ability to purchase properties at lower than market value. As economic downturns lead to financial challenges for individuals and businesses, distressed properties often become available for sale at discounted prices. While a downturn can hurt the short-term performance of commercial real estate, it is essential to remember that the market will eventually recover. For investors with liquid capital (such as Unica Capital), this presents a unique advantage to acquire high-quality assets at a lower cost, potentially unlocking significant value in the long term.

Despite the challenges posed by economic downturns, the UK property market has historically shown resilience and the ability to recover. The private rented sector (PRS) tends to be counter cyclical to the sales market. Even during times of uncertainty, rental demand remains robust, providing a stable income stream for investors.

A Long Term Approach
Unica Capital’s commitment to identifying, financing, and managing unmatched real estate investment opportunities positions investors to capitalise on the market’s nuances. With a portfolio comprising prime office real estate across London and international properties, such as long term rental properties in the Alps, Unica Capital offers investors access to high-performing markets with long-term growth potential.

Taking a long-term view is crucial when investing in the property market during a recession. Looking beyond short-term economic fluctuations, investors should consider strategic investment opportunities with strong potential for sustainable growth. Factors such as population growth, infrastructure development, and government policies can significantly impact the market in the coming years, influencing the performance of real estate investment properties.

Despite the challenges posed by global recessions, historical trends have shown that the UK and European property markets, in particular London, often recover after a downturn, making it an attractive option for long-term investment.

What’s next?

As investors navigate through economic uncertainties, maintaining focus, diversifying portfolios, and leveraging investment fundamentals are key. By partnering with reputable real estate investment trusts like Unica Capital, investors can seize opportunities and invest in resilient property portfolios even during recessions.

Published: February 22 2024
Author: Byron Baciocchi

Prime Office Investments, An Industry Overview.

Prime Office Investments, An Industry Overview.

Prime Office Investments,
An Industry Overview.

Unica Capital expands property investment portfolio in Victoria London

The prime office market in 2024 is shaping up for a dynamic year, marked by resilience and growth. As the industry anticipates a positive trajectory, we explore the key trends and factors influencing this sector.

UK’s Prime Office Allure
The United Kingdom maintains its status as the prime strategic investment destination for commercial office spaces, underpinned by the resilience shown since the pandemic. London, in particular, has maintained its position as a magnet for those looking for long-term investment security through sustained prime rental growth. The city’s enduring appeal has consistently drawn property investors from across the globe. Recent data from CBRE’s 2024 European Investor Intentions Survey reinforces this notion, revealing that London is the most attractive city in Europe for investors for the second consecutive year with almost 10% growth compared to Amsterdam (2nd) with 7% and Berlin (3rd) with 6%.

Despite facing ongoing inflationary pressures and global economic fluctuations, London’s resilience has kept investor sentiment strong. The city’s unique combination of economic stability, cultural significance, and robust market potential has consistently supported a positive outlook.

Rising Investor Confidence
REITs that invest in prime offices are increasingly optimistic about the market’s prospects. One significant factor contributing to the buoyancy of the prime office market is the Bank of England’s decision to keep the base rate unchanged. For investors with ample liquidity, this presents a golden opportunity to capitalise on favourable market conditions, making it an exciting time for Unica Capital and other forward-looking property investors.

A view strongly held by Byron Baciocchi, Chairman and Chief Executive of Unica Capital, who stated in a November 2023 Property Week interview, “our own business is on the acquisition trail as we seek to build our portfolio and generate stable returns, looking for both turnkey opportunities but also those where refurbishment and repositioning work can help unlock value.”

The West End drives London’s Prime Office Rental growth
One noteworthy trend in the prime office market is the resurgence of office rentals. London, in particular, has witnessed a remarkable recovery, with prime office rentals surpassing pre-pandemic levels by 3.8%. The West End leads this resurgence, boasting an average rental growth rate of 8.8%. Other areas like Westminster and Victoria are also witnessing substantial growth. Additionally, Soho and Mayfair are experiencing the benefits of their strategic locations, offering connectivity and a wide range of amenities. This is exemplified by recent acquisitions such as Great Smith Street, Wardour Street and Poland Street.

Embracing the Return to Prime Offices
The return to prime office spaces is gaining momentum as businesses emphasise the importance of employees returning to the workplace. Major corporations, including EY, Citigroup, Lloyds Banking Group, and HSBC UK, have introduced policies to encourage office attendance. This shift is indicative of a broader trend toward reoccupying prime office spaces in attractive locations away from the traditional hubs of Canary Wharf to more connected locations like Soho and Mayfair.

Unica Capital’s prime office properties are well-prepared to accommodate a diverse mix of tenants. Some tenants are downsizing as they embrace hybrid working, while larger firms are moving from older headquarters to modern buildings with stronger environmental credentials.

Seizing Opportunities
The prime office market in 2024 offers a wealth of opportunities for investors. Turnkey investments, as well as properties that require refurbishment and repositioning, can unlock significant value in this thriving market.

Investors are drawn to the UK’s prime office spaces, driven by confidence in the market’s potential. Rising rentals, the return to offices, and the evolving needs of tenants all contribute to the positive outlook for this sector. As the industry adapts to changing dynamics, the prime office market remains an attractive and promising real estate investment landscape.

Published: February 8 2024
Author: Alexandre Piechaud

London Prime Office Market Predictions for 2024

London’s Prime Office Market Outlook for 2024

London‘s Prime Office
Market Outlook
for 2024

London prime office market outlook for 2024

In the ever-evolving landscape of the commercial real estate market, 2023 was marked by challenges stemming from soaring interest rates. However, 2023 proved to be a year of opportunity for those with liquidity, and with nearly 30% of 2023’s total deal flow happening in December, market sentiment has shifted to a positive outlook for 2024, for some of us at least.

The expectation that the Bank of England would start to lower interest rates in Spring may be premature, given last weeks news of higher than expected inflation. Those waiting for access to cheaper borrowing will have to hold out a little longer. With uncertainty still hanging over the sector, it will be another year of opportunity for investors with liquidity.

Expectations the Bank of England will eventually start to lower interest rates later this year may come too late for some investors. With interest rates now expect to stay higher for longer, the property sell-off will continue for a while at least. As we step into the first half of 2024, the property investment trends set in motion in 2022 and 2023 are expected to continue. Unherd points out, “Keep the lights on until 2025 and wait for the cavalry of easier money and a resurgent economy to appear on the horizon. Until then, amid low occupancy and cash burn from high-interest rates, wait for rates to come down and for people to return to the office and shopping centres.” This situation paradoxically opens up more opportunities for those of us holding cash reserves.

The continued availability of discounted London office deals, as reported by Bloomberg, reflects the pain borrowers and lenders face, but also signifies a golden opportunity for those with liquidity looking to invest in prime office spaces in 2024. With the supply and demand imbalance continuing to be a driving force behind rental growth, as highlighted by CBRE’s Real Estate Market Outlook for 2024, there will be plenty of desirable properties at reduced asking prices continuing to come onto the market.

This situation is exemplified by the amount of Middle Eastern and Asian investors who have come to the London market during 2023 “Middle Eastern investment into central London offices is the busiest it has been since before the pandemic,” notes research from BNP Paribas Real Estate. This trend has been further reinforced by the words of James Carrington, head of City investment at BNP Paribas Real Estate, who mentioned that “central London commercial investments have become more attractive in recent months to overseas buyers.“

With interest rates now expect to stay higher for longer, London is set for an influx of foreign investment, so a word of warning to those dipping their toe into the market. They should not underestimate the importance of knowing and understand the finer nuances of the London real estate market. Contacts and partnerships that have been cultivated over many years put Unica Capital in an enviable position, with the ability to react quickly and secure off-market deals.

Despite the many challenges, London’s economy is adapting post-COVID, with a renewed focus on quality, sustainability and accessibility. Properties like Poland Street, Cork Street, and Great Smith Street which are delivering high quality prime office space in sought after locations are exemplars of this trend.

The return to the office appears to be well underway, as an ever increasing numbers of businesses demand their workforce return to the office at least 2 or 3 days a week. U.S. headquartered companies adopting a return-to-office policy in the UK are leading the way. This ties in with news that office leasing activity in London was at it’s highest level since 2018 – Activity was 93% higher in the second half of 2023 compared to the first half.

News of the cancelled HS2 2nd phase has already affected the market in Manchester and Birmingham. In contrast, London consistently presents itself as a secure option for strategic investment. A prime example of this is news London already outpacing both these cities (and the rest of the UK) on services exports. Between 2016 and 2021, London’s services exports have grown by 47% to reach £152.2bn. Exports from the UK’s second- and fourth-largest services-exporting cities – Manchester and Birmingham – did also grow, but at much slower rates of 11% and 3% respectively. London will increase it’s share of the market if cities like Manchester and Birmingham do not take drastic action.

With demand for well-connected, high-quality prime office spaces in mixed-use locations within London remaining strong for the foreseeable future, and with construction delays and a current shortage of prime stock, it is predicted there will be a shortfall of 13 million square feet of office space in the City of London by 2040, as reported by The Straits Times. This demand highlight the real potential of growth for those with a long-term investment strategy.

Unica Capital predicts that those who have liquidity and the ability to act fast in this market will thrive in 2024. Energy-efficient upgrades attract tenants, location, and quality are paramount, and the ability to adapt and seize opportunities is crucial. While the outlook for 2024 is cautiously optimistic, those with liquidity, and the ability to act swiftly when opportunities arise are looking forward to a busy and productive year. With market sentiment improving, but the expected decrease in interest rates on hold for now, a host of landlords will be looking to offload further assets. Staying vigilant, seizing opportunities as they arise and priming ourselves to capitalise on emerging market trends as they happen will be the key to success in 2024 and beyond.

Published: January 25 2024
Author: Byron Baciocchi

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