Foreign share of City property soars to 20%
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Your support makes all the difference.FOREIGN companies now own 20 per cent of all property in the City and have nearly trebled their stake since 1983, with that trend set to accelerate, according to a survey published today.
The report from Development Securities, the property company chaired by Lord Gowrie, the former Minister, predicts that if current growth rates are maintained more than half of the City will be in foreign hands by 2025.
The report, titled Who owns the City?, claims: "In terms of overseas ownership, London is the only truly world city in Europe. Neither Frankfurt nor Paris come close, where overseas ownership of offices is estimated at under 5 per cent."
German companies, which bought heavily into London towards the end of the last recession, are currently the largest foreign owners of office space, followed by Japanese and US companies.
Occupation by foreign firms now stands at 35 per cent, with the US having the largest presence, says Development Securities. The American companies often opt for London as their chosen base from which to respond to the development of the European single market, it says.
The report claims that international companies are attracted to London only partly by the City's "critical mass" of financial services expertise. Equally important in terms of pulling power is London's attraction as a city to live in, with its language and cultural assets.
The survey warns, however, that concentration on companies in the financial, insurance and real estate (FIRE) sector increases the City's exposure to risk in a recession.
More than half of all the City's offices are now both owned and occupied by companies in the FIRE sector. FIRE firms own 80 per cent of the City.
Lord Gowrie, chairman of Development Securities, commented: "Over the last fifteen years, the City has had a phenomenal success in attracting overseas firms to locate here. The vibrancy of London as a place to live in has played a large part in this process, thereby giving it a massive advantage in world financial business." The report adds that owners and occupiers will increasingly seek to establish or expand their London presence beyond the boundaries of the Square Mile.
The report itself covers "City fringe" areas as far west as Holborn, as north as The Angel, Islington, and as far east as Aldgate, with London Bridge making an appearance in the south.
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