Nationally, 2016 was marked by the shock vote to exit Europe. What was initially considered as a relatively benign referendum, ultimately divided the nation and prompted some funds into panic commercial property sales as many investors sought redemption. A few pension funds called the market well in advance but most were caught in the post-Brexit storm after the vote and the after-effects of the tumbling pound.
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The US election then confounded the market as Donald Trump’s grandstanding took hold and destabilised the markets further. Markets were volatile after both events but have since regained some stability as investors in all sectors adopt a wait and see attitude to both Trump’s policies and the legality of the Brexit and triggering of Article 50.
Notably, in Victoria, the reduction in investment transactions was significant as the total volume fell from over £1 billion of deals to a low of sub £400 million, the lowest since 2010. Elsewhere in London, foreign investors have taken advantage of the falling pound but Victoria has not yet seen significant increases in overseas inward investment.
Availability of leasehold property was well up on the previous year as the Nova and Verde schemes completed, albeit slightly behind schedule. Each attracted strong attention with some high profiles deals being undertaken, although the practical completion date for the majority of the space, including the retail elements, were also dogged by delays.
Fortunately, the retail scheme in Nova is now nearing completion and the broad range of eateries will transform the area around the station. The new tube station entrance is also close to opening which will complete this next phase of the regeneration of the area.
In the development market, residential and commercial values have reached parity and it is likely that some schemes with residential consent are now not going to be undertaken as the residential market cools off.
Irrespective of the number of deals done, 2016 has been a landmark year for Victoria, bringing to an end years of works disruption, particularly around Victoria Station, and heralding the arrival of a transformational new amenity offering, and tube accessibility. There can be no denying that Victoria is now Core West End.
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