Abstract
London’s real estate market is primarily driven by its financial markets. Profitability and remuneration in many of London’s financial sector companies are directly linked to the level of the stock market. So the development of the real estate market is closely linked to the global economy and only somewhat regulated by national and local planning policy. In this chapter attention will be paid to the size and dynamics of London’s commercial real estate markets, followed by the main market institutions with special attention to planning regulation and taxation. The linkages between London’s real estate market and the world economy will be revealed. An outlook for the capital of the UK complements this chapter.
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Notes
- 1.
Guardian, London, January 21st, 2005.
- 2.
London’s population is currently 7.8 million people and represents 13 % of the UK total (62 million).
- 3.
The 70 % core catchment refers to the geographical area in which 70 % of residents report Central London to be their primary shopping destination for comparison goods.
- 4.
The definition of inner and outer London is explained in the following link: http://www.statistics.gov.uk/geography/downloads/london_boro.pdf.
- 5.
To which we can add some 6–7 % working in hotels and catering.
- 6.
70 % of visitors are estimated to visit Oxford Street.
- 7.
Tourists from the Eurozone represent more than 50 % of the total.
- 8.
New West End Company is a major partner in the £1.5 bn regeneration programme for this area.
- 9.
Source: ODPM (2011). This figure includes only retail space that is located in recognizable, prime locations and in shopping centres. It excludes other types such as warehouse-type units. It includes Oxford Street, Bond Street, Covent Garden, Kings Road, Knightsbridge, Kensington High Street and the City of London. It also includes space in outer locations such as Watford, Romford and Croydon.
- 10.
Prime rents are defined as the highest open-market rent than can be achieved for a unit of the highest quality in the best location.
- 11.
Section 106 was replaced in 2012 by the Community Infrastructure Levy (CIL): a set level of contribution per m2 of new development towards infrastructure delivery costs.
- 12.
Valued up to £150,000: 0 %; £150,001–250,000: 1 %; £250,001–500,000: 3 %; more than £500,000: 4 %.
- 13.
Here a club deal refers to joint financing by two or more private equity partnerships in a consortium (see Officer et al. 2010).
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Acknowledgement
Information from CBRE, Experian, Grosvenor and JLL databanks has been provided at our request and is greatly appreciated.
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Barkham, R., Grilli, M., Parpa, C. (2014). Financial Markets in London Metropolitan Commercial Real Estate. In: Nozeman, E., Van der Vlist, A. (eds) European Metropolitan Commercial Real Estate Markets. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-37852-2_3
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