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Prime London Central Residential: Is the bubble about to burst?
A Presentation by London Central Portfolio, Residential Funds and Asset Managers
Looking at PLC residential as a commercial asset class
The past…the present...
The future?
The elephant in the room
Risk Warning
Views and opinions expressed in this presentation are those of London Central Portfolio Limited and do not necessarily represent the views of any third party
associates who in no way warrant the accuracy or completeness and accept no liability for any direct or consequential losses arising from its use.
There can be no assurance that current market conditions will remain in the future. Past performance does not guarantee future results. Actual results may
differ materially from the forecasts/estimates. Views, opinions, trends and prices expressed are subject to change without prior notice and are expressed
solely as a general market commentary and do not constitute investment advice or a guarantee of returns.
Not the UK…
23m residential units
63.2m people
61,840 sq. miles
Average price £238,293
Not Greater London…
12.5% UK population
8m people
33 boroughs
Performance closely correlated to the UK
Not...Canary
Not... the “East
Wharf,
End”,home
homeof
ofMultinationals
the Olympic Village
11,430
19,574 Planning permissions. Average price £370,500
£231,296
It is Prime London Central…the home of...
184,308 units
5,000 transactions p.a.
613 under
construction
378,045 people
Average price £1,359,736
Made up of numerous ‘villages’ around Hyde Park…
…It is the “bullseye” of the capital
The long term…
Globally desirable
Go-to destination
International centre
Low dependence UK economy
Highly demanded asset backed investment
Irreplaceable architecture
London Residential – A Capital Growth Asset
Capital Growth Since 1969
Prices have increased over 65 times since 1969
Source: CML, ODPM, OCLG
Past performance is not a guide to the future
The short term…
A robust performer in volatile markets
London Central vs FTSE 100
(Q3 2007 = 100)
A strong story to tell in all market conditions…
Performance of gold versus London Central
(1995= 100)
To many foreigners, Central London is ‘cheap’…
£ ‘cost’ of Central London property based on different exchange rates
(Oct 2007= 100)
The scares resource: Volumes fall by 59%…
Annual actual transaction volumes from 1996
9111
5365
In 2010 HNW population was 10.8m:
2000 buyers for each London property
Current growth is spot on long term trend…
London Central actual growth versus long term average growth
(1995= 100)
9% p.a.
Significant Growth Projected
LCP (36%)
Anticipated price growth for Prime London Central residential property
Index 2012 = 100
JLL (30%)
Savills (+19%)
Knight Frank (+18%)
Source: Jones Lang LaSalle 'On Point', Savills Residential Research, Knight Frank Residential Research
Central London is not just for the globally rich…
Social Housing:
25% versus 18%
Private Rented Sector:
38% vs 17%
Second Homes:
5.6%
Empty Homes:
1.4% vs 1.1%
Young, between 25 – 44:
40% vs 27%
Cosmopolitan
Not Born in the UK:
53% vs 13%
New residential property taxes...
7% for £2m+
Annual Tax For Enveloped Dwellings
15% for £2m+ for certain NNP’s
Capital Gains Tax
Carve-outs Good News For Investors …For Now!
But more taxes in pipeline…
GDP in Westminster > any other London borough
£100,000 students at world top universities
PRS
contributes
£1.5bn p.a
to economy
and £0.5bn to
the Exchequer
Tourism and night time economy: 8bn p.a.
Many drivers for growth in PLC...
Global capital – the jewel in the crown
Our 6th biggest “import”
Tiny in terms of size
Enormous in terms of impact
Long and short term indicators do not suggest a bubble, but
continued buoyancy
Long and short term indicators do not suggest a bubble, but
continued buoyancy

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