London has long been seen as a cosmopolitan city – a centre for all nationalities, where people from all backgrounds can converge to do business.
Much of the city’s success in recent years can be attributed to the way it has attracted foreign investment, and nowhere is this truer than in the property market.
The high prices commanded by commercial property owners in the capital stem from high demand for their premises.
And this demand is created by investors from around the world recognising the potential of London as a trading base, and seeking their own premises in the city.
Without overseas buyers, there would likely be a surplus of property space in London, which would cause negative inflation in the market.
Some would welcome the increased affordability of property, but at the same time, removing London’s international flavour would impact heavily on the local and national economies.
Domestic businesses would likely lose many of their customers, and then the benefits of a central London base would be less apparent.
The status of London’s financial services sector would also take a significant hit, leading to a reduction in gross domestic product for the economy as a whole.
In fact, the UK would likely enter a recession it would be unable to escape from.
Investment from the east
Clearly foreign investors have an important role to play in making London what it is – one of the world’s great trading centres.
According to Nick Dawson, London property finder at Garrington, much of the current demand in super-prime areas of the capital is being generated in Russia and the Far East.
He explained that ultra-high net worth individuals from this region have the budgets to purchase in the top locations, and much of the recent activity has involved such buyers.
But Mr Dawson said that high-worth European buyers may not necessarily buy in prime areas of London anyway.
This is because they are not so far from their natural origins, and are less likely to be locating their regional headquarters in the city.
More local companies prefer to invest in their largest residence in their home country or even further afield, Mr Dawson claimed.
Either way, it is clear that the London commercial property market is continuing to perform strongly, and there is no shortage of demand for office space in the capital.