International Private Capital Survey 2013/2014
Investor views on London’s position
However, the greater openness to risk extends to investment intentions beyond
emerging markets. In the more traditional cities such as London, increased
disposition for investment in assets and locations outside prime core areas,
extending into markets outside the British capital, is expected to continue. This is
underpinned by greater confidence in the underlying economic fundamentals in
play, as well as frustration in securing prime stock at an acceptable yield.
Despite greater attention on home markets, London’s appeal to global HNWI
is reaffirmed by the survey results; it was named amongst our clients’ top
three investment destinations by eight of the nine global locations surveyed.
This continues to be driven by its perceived safe haven status, combined with
the importance placed on lifestyle factors and links with the city through the
education of children. This underscores a long term and to an extent, qualitative
investment approach to the city, rather than a short–term, returns based strategy.
Worries over the investment implications of short term fluctuations in interest
rates may therefore be overstated.
However, perhaps of greater concern is uncertainty surrounding the tax regime
for overseas and wealthy individuals, as well as the wider economical and political
tones. The survey finds that it is financial ambiguity, rather than higher taxes
themselves, that has dented investor confidence and thus potentially diminishes
London’s safe haven status. While London’s position as a European outsider
currently provides valuable positioning for HNWI, it is essential that this is
combined with a stable tax and economic story in order to retain this investment
appeal in the longer term.
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