World-class commercial property is the key to driving London’s long-term growth
In this guest article, Sameer Gehlaut, the Founder of one of India’s largest conglomerates, Indiabulls, looks at the important role that commercial property plays in driving London’s growth.
London is at a pivotal moment. Recent events in Westminster dealt a blow to business confidence and sent the City into a spin. Furthermore, investors are tightening their purse strings in light of economic uncertainty and the cost-of-living crisis continues to dominate headlines.
This new wave of political and economic challenges has led some people to believe London’s status as a global financial hub is under threat – but this is far from the truth.
If there’s one thing we learnt from the Covid pandemic and Brexit, it’s that London will always bounce back stronger. And while most people look to politicians and policymakers to drive economic growth, the business community should also take the lead in reinvigorating the capital’s economy.
Backing the high-end commercial property market can help put the UK firmly back in the spotlight for international investors and steer London on the path to long-term growth.
This might sound counterintuitive at first – research showed that ten days after the recent mini-budget, millions of pounds were withdrawn from property markets throughout the UK.
But now is not the time for knee-jerk reactions in London’s commercial property market. In fact, there is significant cause for optimism.
London continues to be Europe’s most attractive city for foreign direct investment according to a recent FDI study, with 27% of foreign investors describing it as such. And the fact remains that it’s practical to do business here – we have a strong legal tradition, English is the international ‘language of business’, and we live in a time zone that’s conducive to doing business with the rest of the world.
We also have some of the world’s finest entertainment, arts, events, museums, sport, nightlife, shopping, and dining. And that will never change.
But London’s reputation as a global beacon of business and cultural capital also relies on the infrastructure to support it, and now is the time to invest in high-end commercial real estate to continue attracting global business, people, and capital.
World-class office facilities are no longer a luxury reserved for the world’s financial institutions in the Square Mile or global tech giants in Silicon Valley. Traditional office spaces with basic facilities need to be resigned to history, and providing premium physical office spaces is a critical part of attracting the best and most modern companies to our shores.
It also helps attract the best talent. We live in an era of hybrid working and London must win the global battle for talent in today’s remote, digital, and flexible workforce. Employees are expecting more from their offices and demanding a great work-life balance from their employers.
We must encourage workers back into the city by creating spaces that staff want to go to – not have to go to.
Attracting the best companies and more workers into the city also sets into motion a cash flow cycle that steers London on the path to long-term growth. New employees strengthen the residential property market, workers spend disposable income enjoying London’s world-class hospitality and entertainment, and corporations boost tax revenue. This opens up more capital for investors and property developers to reinvest and drive further growth.
Another area that holds the key to unlocking long-term growth in London is luxury, full-serviced accommodation for large families.
High-end tourism is an industry worth around £30bn to the UK, and recent research by Walpole found that the quality of London hotels was one of its biggest draws. But there is a serious gap in the market for family-focused, high-end accommodation.
London offers some of the world’s finest family experiences for families to enjoy – so why do our private accommodation options lag behind?
We’re missing out on a lucrative market of high-spend families wanting to fully embed themselves in London for two or three weeks but are unable to find the right accommodation. Hotels in the city often only offer two-room suites and apartment rentals lack the fully-serviced experience these tourists are screaming out for.
These families have huge spending potential and could provide a much-needed lifeline for our amazing restaurants, venues, and tourist attractions. But more and more are turning their back on London in favour of more family-friendly destinations outside the UK. London must complete its offering as a premium destination to ensure it continues to attract the tourists who spend the most.
Investing in world-class commercial property is central to ensuring London stays at the very top of its game. Investors, business leaders, urban planners, and policymakers alike should turn their attention to ensure we can offer the full spectrum of the best possible commercial office spaces and fully-serviced luxury apartments. This is what will continue to attract the most successful companies, promising talent, and high-spend tourists to the capital in the years to come.