London doing well despite wider property malaise, says report

The European real estate sector is set for a very slow recovery, according to a new report, although investor sentiment regarding London has improved markedly.

PriceWaterhousecoopers and the Urban Land Institute (ULI) surveyed over 600 property sector figures, who acknowledged that credit conditions were easing and real estate values rising.

However, they warned that Europe's economic fragility, the need to refinance some huge real estate debts and the possible future withdrawal of recent state aid make it necessary for investors to proceed cautiously.

More positively, however, London's popularity has risen markedly since 2009, especially with Middle Eastern and Asian investors, with the report rating it the fourth best city in Europe for investment in existing property and first for new acquisitions, particularly offices.

Williams Kistler from ULI explained: "Transparency and liquidity attract investors who would not consider other markets and this is holding true for both London and Paris.

"These markets have strong interest from non-European investors. 2010 is all about playing it safe and avoiding risk."

Latest figures from the Royal Institution of Chartered Surveyors indicate that 56 per cent more surveyors recorded a rise rather than a fall in demand for offices in central London during the final quarter of last year.

04/02/2010