Viewpoint – Please, Sir, I want some more… real estate.
Hoping that you are in a sympathetic mood to allow me a slightly tenuous link, with my thoughts turning to plans for some restful time at home at year end and the holiday films on television, I am drawn to Oliver’s famous line of “Please, Sir, I want some more”. For, as the holiday season is rapidly approaching, so the appetite, particularly from Middle Eastern investors for international real estate is rapidly rising.
As I write, the Qatar Investment Authority has increased its bid for Songbird Estates, the company that controls London’s Canary Wharf as well the “Walkie Talkie” skyscraper in the City and a regeneration plan for the Shell Centre on the Southbank of the Thames river, to £2.6 billion. Time will tell, but momentum would suggest that agreement may soon be reached on an acceptable price.
On a slightly more modest scale but as a further indication of such unsated appetite in the Gulf at the moment, we at 90 North have witnessed a significant increase in enquiries. What is rather counterintuitive, given that much of the wealth in the region derives from oil, is that the increased appetite has occurred at the same time that oil prices have fallen to their lowest level for five years.
The theory in the office is that such a fall is encouraging investors to work their existing assets harder. Combined with falling global inflation suggesting that interest / profit rates will remain low for some time and the consistently meagre returns from bank deposits, the returns from bricks and mortar look ever more attractive.
Whatever the reason the trend is there but should definitely not be construed as a desperation to invest, as the quality of both property and investment strategy demanded remains at an encouragingly high level.
Being sure that we can provide a significantly better quality of real estate to investors than the equivalent gruel requested by Master Twist, I am looking forward to the increased activity but also to some time off.
I wish everyone a successful run into year end and suggest that they also make time to recharge their batteries before, based on recent events, an even more frenetic 2015.
Author Philip Churchill