London economy proving resilient

London is outperforming the wider UK economy and could avoid a recession, a new report suggests.

An index of business output in London compiled by NatWest climbed to 50.2 in December from 48.2, indicating that the capital’s economy is growing, City A.M. reports.

Across the UK the same index dropped below the 50-point threshold that separates growth and contraction as activity shrank for the fifth month in a row.

The Bank of England has forecast that the UK will fall into a long recession which will continue into the first half of 2024.

There are some positive signs, however.

Energy prices have dropped back from the peak seen last year and are expected to fall below the £2,500 price cap in the summer. Meanwhile, overall inflation is predicted to continue falling over the course of this year.

NatWest chairman Sir Howard Davies, a former deputy governor at the Bank of England, told the BBC’s Sunday with Laura Kuenssberg programme that many people saved money during the pandemic, so they have a cushion to help sustain their spending.

“The simplest thing to think about the economy is it’s flatlining at present,” Davies said.

London loses over 7,000 finance jobs to EU post-Brexit

More than 7,000 jobs in the financial services sector have moved from London to the European Union as a result of Brexit, according to the latest Brexit tracker from consultancy EY.

This estimate is a decrease of 400 from the total anticipated in December, and is down from the 12,500 job moves forecast by firms in 2016.

EY noted, however, that 44% (97 out of 222) of the largest UK financial services firms have moved or plan to move some UK operations and/or employees to the EU since the referendum.

“Staff and operational moves across European financial markets will continue as firms navigate ongoing geopolitical uncertainty, post-pandemic dynamics and regulatory requirements,” said Omar Ali, EMEIA financial services leader at EY.

Dublin is the most popular destination for employee relocations and new European hubs or offices, with 36 financial services firms announcing intentions to relocate UK operations and/or staff to the city. Luxembourg is in second place, attracting 29 companies, followed by Frankfurt with 23 companies and Paris with 21.

Paris scores highest in terms of attracting jobs from London, with a total of around 2,800, followed by Frankfurt at 1,800, and Dublin with 1,200.

The tracker also shows that since the referendum, 24 firms have publicly declared they will transfer just over £1.3tn of UK assets to the EU. There was a last-minute increase in firms announcing asset moves in the months before the end of the transition period on 31 December 2020, when it became clear that the UK-EU trade deal would not offer concessions for the UK’s financial services sector.

London accounts for almost half of foreign investment into UK

New figures highlight the UK’s north-south divide and the dominance of London when it comes to foreign investment in the UK.

In the pre-pandemic year of 2019, the value of inward foreign direct investment (FDI) stock in London (£660.8bn) was more than three times greater than the second-highest inward position for the South East (£197.6bn).

FDI in London accounted for close to half (42.4%) of the UK’s inward FDI position in 2019, increasing to 55.1% for London and the South East combined, the Office for National Statistics (ONS) said.

The figures also suggest that for every job in London there was £108,656 of FDI stock, and £39,727 per job in the South East. The average for the other English regions plus Northern Ireland was £20,801 for each job.

Investment from the European Union represented the highest proportion of inward investment in most UK countries and regions, with the exceptions being London, Scotland and the North East.

The UK government has made the “levelling up” of the UK regions a priority to help spread economic prosperity to all parts of the country.

Homeworking costs London’s hospitality sector £2.3bn in lost lunches and after-work drinks

Already hit hard by Covid-19, London’s economy could see a huge knock-on effect from people continuing to work from home after lockdown.

The widespread shift towards homeworking as a result of coronavirus has “sucked the life out of many central locations”, according to Pablo Shah, a senior economist at the Centre for Economics and Business Research (Cebr).

Google mobility data shows that at the peak of the lockdown in April, the number of people going to places of work on weekdays in London was 77% lower than before the crisis. More people were going out to work by June, but numbers remained around 60% lower than the benchmark period of 3 January – 6 February.

Based on the Google data and the average spending by employees near their workplaces of £202 per month — including lunch, after-work drinks, coffee/tea, snacks, stationery and other office equipment — Cebr calculates that the pandemic resulted in £2.3bn of spending in shops and food/drink establishments near London employment hubs being lost or displaced between March and June.

The economics consultancy has estimated previously that when the ‘new normal’ emerges in 2021 it is likely that 30% of employees in London will still be working at home on any one day, compared with only 11.9% of employees before the crisis.

“Scaling from this, the capital will continue to lose out on around £178m per month compared to what was previously spent by employees near their places of work,” Shah said.

And if employees and businesses are driven away by London ceasing to be “fun”, the effect on the capital’s GDP could be many times more, he concluded.

Great Portland Estates lets Rathbone Square office space to Facebook

London property investment and development company Great Portland Estates plc (GPE) has revealed that all of the office space in its development at Rathbone Square, W1 has been pre-let to social media company Facebook UK Ltd (Facebook).

According to GPE, Facebook has signed an unconditional agreement to lease the entire 227,324 square feet of consented office space at Rathbone Square. The building will be occupied by Facebook on a 15 year term without break from practical completion to shell and core condition, scheduled for February 2017. The company will pay an initial rent of GBP16.9m after receiving 30 months rent free from completion of the offices and a capital contribution to ensure it is fit out to be one of the best Category A office spaces in Soho.

Facebook has also signed a conditional agreement to lease another 15,461 square feet, subject only to GPE obtaining planning consent from Westminster City Council (WCC) for a change of use on this space from retail to office. On receipt of this planning consent, Facebook’s total occupation of GPE’s One Rathbone Square development would be 242,785 square feet.

One Rathbone Square was acquired by GPE from Royal Mail Group in September 2011 and received planning approval in October 2013. The 418,698 square foot mixed use development also includes 142 high quality private residential apartments and 24,222 square feet of retail around a new public garden square.

The company added that following this pre-letting to Facebook, 87% by value of Rathbone Square will be either pre-let or pre-sold.

In addition, GPE has also agreed to provide Facebook rights of first offer on: office space at 73/89 Oxford Street, W1, known as 1 Dean Street; and on co-terminus leases with One Rathbone Square. 

Portfolio director of GPE, Neil Thompson, commented: “We are delighted to welcome Facebook into the GPE portfolio and we look forward to providing them with a world class London headquarters in this outstanding development.

“We’ve long believed in the potential of the East End of Oxford Street, and have built an enviable portfolio of developments totalling almost 700,000 sq. ft. in the area. An endorsement of this scale from one of the world’s largest and most recognised brands, along with the arrival of Crossrail in 2018, will help transform this exciting part of the West End.”

Facebook’s head of EMEA, APAC and Americas Real Estate, Robert Cookson, added:

“The move to our new offices at One Rathbone Square highlights our commitment to invest and grow our talented teams of people based in London, from engineering and analytics to partnerships and design, who help us connect over a billion people on Facebook across the world. This is a fantastic opportunity to occupy a high quality new development in the heart of the West End. The location has excellent amenities and connectivity, with the very best the city has to offer right on the doorstep including Crossrail once it is established.”

How Teddy Sagi is taking on the UK

Teddy Sagi is on a bit of a spending spree. Earlier this year, the Playtech billionaire paid a massive £400 million for Camden Stables Market. Just a few weeks back, he poured another £90 million into the iconic Camden Lock Market.
Camden Lock

London Calling

He is only just getting started though. An Israeli national, Sagi is based in Tel Aviv but leads the sort of jet-setting life that you would expect of a billionaire bachelor. However, his acquisition of prime land in North London, coupled with a number of recent listings on the London Stock Exchange, have led many to wonder whether the British capital may play a larger role in Sagi’s future business plans.


It certainly seems that way. Playtech itself has been listed on the London Stock Exchange since 2006, and is now listed as a FTSE 250 company. Over the past few years, Sagi himself has spearheaded two high profile IPOs on the London Stock Exchange: SafeCharge International Group plc and Crossrider Ltd.

Regulation watch

Sagi’s financial ties to the UK are obvious, but his long-term connections to London are perhaps more apparent in his commitment to following the UK’s increasingly strict gaming legislation and regulations. Recent laws, such as the US’ Unlawful Internet Gambling Enforcement Act of 2006, have forced companies as Playtech to launch new brands or make adjustments to their business plans in order to obtain their operating licences. Sagi has made every effort to be at the forefront of the UK’s gambling regulation.

As a result, Playtech is now ready to launch a slew of new products on the regulated UK market, which are set to raise Sagi’s profile in the UK even further.

One upcoming venture is Titanbet Casino, a new Playtech-developed brand which has been specifically created for the regulated market in UK. Although the site does not yet have its licence in the UK, it is expected to happen in the very near future.

Global Domination

After this, who knows? The latest rumours suggest that Sagi is harbouring an interest in the UK football scene – football in particular. According to multiple sources, he is said to be considering a takeover bid on the English Championship football team Reading FC.

Meanwhile, market watchers are watching Sagi for hints as to his next move. In September, Playtech announced the £8 million acquisition of Aristocrat Lotteries, suggesting an expansion into the video lottery terminal (VLT) marketplace.

And then of course, there is the small matter of those 12.5 acres of prime real estate in Camden. While it is likely that Sagi will continue to maintain the existing market set-up, the possibilities are endless. City centre mansion, or gaming headquarters? Sagi is nothing if not innovative, and the world will be watching as his domination of the UK continues.

Olympic Legacy Budget helps to fund £2.3m London Professional Apprenticeship programme

A new apprenticeships programme in London’s professional services sector is to receive a total of GBP2.3m in funding, comprised of GBP1.4m from the Olympic Legacy Budget and GBP900,000 from professional services firm PricewaterhouseCoopers LLP (PwC), the UK government’s Department for Business Innovation & Skills (BIS) announced on Tuesday.

Designed to attract outstanding young Londoners into professional services roles, the London Professional Apprenticeship (LPA) programme will provide 250 apprenticeships. The funding from the Olympic Legacy Budget will be used for the design, set up and early implementation of the LPA scheme to the end of this financial year, while the contribution from PwC will fund ongoing costs that will cover training and networking events, mentoring and a ‘graduation’ ceremony.

BIS said the LPA programme will focus on the six Olympic growth boroughs, which are: Barking and Dagenham, Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest. An apprentice matching service will be provided to small businesses that join the LPA programme, making it easier for them to access talent. The project will also enable apprentices to learn together and develop networks that will benefit them throughout their career.

An apprentice recruitment drive will commence at the beginning of 2014 and businesses will be encouraged to employ apprentices through the LPA. The programme will focus on small and medium-sized enterprises (SMEs), as only 5% of SMEs in London currently employ an apprentice.

According to BIS, the professional and business services (PBS) sector is forecast to create a net increase of over 600,000 jobs by 2020. The LPA programme has been tailored to meet the needs of London’s employers and young people; therefore it includes training modules that are relevant to the capital, such as exporting, entrepreneurship and London’s role in the UK and global economy. However the model has been designed to be sustainable and BIS said it could be applied to other cities or regions.

Divisional Apprenticeships Director National Apprenticeship Service, Vic Grimes, commented: “The London Professional Apprenticeship programme is an excellent opportunity offering talented young people in London a career path into the professional business service sector and for businesses, particularly SMEs, to grow their future workforce. The National Apprenticeship Service is impressed by PwC’s ambitious targets and we look forward to supporting them through our Apprenticeship services.”

Financial reasons to invest in London property

Residential property in London has attained a reputation as a safe asset class and as far as any investment is a safe bet, London property appears to be the place to invest with values outpacing all other investment types, and it’s not just the case in the more affluent areas of London like Kensington and Chelsea or Mayfair – up and coming boroughs like Lewisham and Tower Hamlets are seeing prices continue to increase too.  According to a report by estate agent, Savills, Lewisham is set to see its property prices rise by 20% over the next five years.

But it’s not just Savills that are recommending investing in London property as a sound financial decision. The world’s biggest property agent, CBRE, has produced a report that ranks the UK’s capital city right at the top spot for the most attractive places to invest in property. And, in fact, London was in pole position on the same report last year too. So, with property prices continuing to rise in the capital despite the rest of the UK’s continued economic turmoil, could London make it three years in a row?

Despite property prices hardly being buoyant in other areas of the UK (Craigavon in Northern Ireland has been the hardest hit with property prices having fallen by 18.4% down to an average of £91,530), London prices have remained safe within their own economic environment. property investment opportunities in London are plentiful and can be found all over the capital. The top five places to invest, according to a report by Savills, are the boroughs of Westminster, Kensington and Chelsea, Hammersmith and Fulham, Camden, and Islington. For some of the best property investment options, visit Galliard Homes.

New research by estate agents, Cluttons, has revealed that the average price of a flat in central London has soared above £1 million for the first time ever. Elsewhere in London, however, it is possible to stay well under this price bracket – and the Land Registry of England and Wales shows that the average price of a flat in London (information sourced between January – March 2013) was £391,496.

A popular place to buy property outside the central London belt – but within easy reach of it – is Greenwich. Here, property owners have the benefit of all the amenities of London on the doorstep but live in an area with more of a village feel. Greenwich park, the Observatory, and the Cutty Sark – along with the Thames, a great selection of pubs, independent shops and the ever-popular market, continue to make Greenwich a popular prospect with buyers. What’s more, with the newly improved tube network, commuting time from Greenwich has been eased considerably.

There are more financial benefits of investing in property in London if you are to consider the property renovation market. Although somewhat saturated with people turning their hands to property makeovers, there are still opportunities in the property market for those prepared to look. First time buyers can climb the property ladder quickly if they’re prepared to turn their hand to property development. London boroughs on the outskirts of the capital are more likely to hold investment opportunities within an affordable price range. Developers, and those with a portfolio of properties, meanwhile, will be able to invest in houses with more attractive postcodes. However, even if it’s just a case of a quick lick of paint, a new kitchen and a new bathroom, thousands of pounds can easily be added to the value of your home in a matter of a few months.

China’s Dalian Wanda Groupto develop real estate project in Central London

Chinese commercial property and entertainment conglomerate, Dalian Wanda Group, revealed today that it plans to commence a major investment programme in the UK.

Wanda’s luxury hotel brand is making its first move overseas with a GBP700m development project for a five-star Wanda hotel at a prime location on the South Bank in London. The 160 room hotel will have views overlooking the River Thames and landmarks such as The Palace of Westminster and Battersea Power Station. The total size of the construction project is 105,000 square metres, with approximately 20,000 to be used for the Wanda hotel and 63,000 square metres of premium apartments.

The company has also entered into a definitive agreement with UK luxury motor yacht company Sunseeker International Ltd, which is said to have provided yachts that have featured in James Bond films. Under a total investment deal of GBP320m Wanda will acquire a majority shareholding of 91.81%, while Sunseeker management will acquire the remaining 8.19%. The transaction is expected to be complete by mid-August.

Wanda said it is committed to upholding the values and heritage of the Sunseeker brand and its chairman Wang Jianlin commented: “Acquiring Sunseeker deepens Wanda’s international influence, further enhances our position in the global luxury, entertainment and tourism markets, and represents an important step forward for the overall development of our business. With the committed support of Wanda, Sunseeker is well-placed to take full advantage of opportunities in China, one of the world’s fastest growing luxury yacht markets. We are confident that this will bring Sunseeker’s business to the next level.”

Sunseeker will remain a British company under Wanda ownership. The company will continue to be headquartered in Poole, Dorset and maintain its existing production bases in the UK along with its existing workforce. Robert Braithwaite, the founder of Sunseeker, will continue to be involved in the management of the business and the current management will remain on the Sunseeker Boards.



Contactless payment introduced on London buses

Bus passengers in London can now use a contactless debit, credit or charge card to pay for their journey, Transport for London (TfL) announced today.

To use contactless payment, passengers can touch their payment card on the yellow Oyster card reader and pay the single Oyster fare on any of London’s 8,500 buses.

The Mayor of London, Boris Johnson, welcomed the new technology and said it means that people can avoid having to search for change and also benefit from the Oyster fare discount.

According to TfL, London’s transport authority, more than 85,000 bus journeys in the capital each day are still paid for using cash. The single fare costs GBP2.30 when paying by cash, which is much higher than the GBP1.35 Oyster fare. Moreover, at least 500 people every day try to pay their fare with a high denomination note for which the bus driver does not have change.

Initially this new payment method will only be available on London’s buses and daily price caps will not be applied, but by the end of next year contactless payment will be extended to cover travel on the London Underground, Docklands Light Rail, London Overground and trams. Daily and weekly price capping will be included at this stage, TfL said.

The authority is also in talks with the train operating companies that serve London about the possibility of accepting contactless payment cards on National Rail services where Oyster is currently accepted.

Contactless enabled cards are currently issued by a number of UK banks. The technology allows users to safely make a fast payment for goods or services costing GBP20 or less without entering a PIN.