EDITOR’S COMMENT “Make sure you grab some of this food while you can, it’ll disappear fast.”
That was the message from a member of the UK Cities & Partners team to me and other guests at its stand at this week’s Expo Real conference in Munich.
I didn’t need telling twice. I’d skipped breakfast, I was famished and there was no way I was going to stand politely aside and let everyone else hoover up the canapés that had just been laid out on the counter. I piled as many as I could onto a napkin and shovelled them into my mouth while I made small talk.
My attitude to free food is very much the attitude that real estate investors and agents in the UK would like to see more of from domestic and international dealmakers. A bit more of the FOMO factor – grab some of these assets while you can, they’ll disappear fast.
In a piece for EG this week, Savills’ head of UK and European commercial research, Mat Oakley, asked whether a pick-up in deal activity over the autumn months and end of the year would be “more noise than signal”. He’s hopeful that won’t be the case.
Conversations around the UK as an investment destination have certainly become more positive, Oakley wrote. “Some of this confidence comes from data, such as the fact that the MSCI total return for office, retail and industrial went positive in August for the first time in over two years,” he added. “Some comes from comparison – in essence, that we look more stable than some other markets where investors might have placed money. And some just comes from the fear of missing out on the traditional rapid recovery in values that has always taken place in the UK after a shock.”
Like a fresh delivery of nibbles, there is now more stock coming to market to whet investors’ appetite. Nuveen is taking a second run at selling the “Can of Ham” at 70 St Mary Axe, EC3, this time for somewhere in the region of £320m rather than the previously attempted £400m. Brookfield wants at least £500m for its Citypoint tower, EC2, which would be a notable drop on its most recent valuation. More than 50 interested buyers are already said to have inspected the building. These and other potential trades such as CC Land looking to offload its One Kingdom Street, W2, could make for a bumper fourth quarter, even if the three-month tally isn’t enough to make up for shortfalls across the rest of the year.
Nonetheless, is there really a sense that investors simply MUST move to get deals away now? That sentiment was lacking at Expo. A healthier Q4 will be welcome, and a brighter 2025 even more so. But there’s a long way to go. One interest rate cut alone won’t cut it. The Budget at the end of this month could yet bring some nasty surprises for the market. Whether the aforementioned sellers can get the price they want for their landmark sites is far from certain. But if those deals fly, more will surely follow.
The food at the UK Cities & Partners stand was pretty good, for the record. Although to be fair, when you’re that hungry, you might just have an appetite for anything.
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