London Market Overview - Elysian

London Market Overview
Prospects in a Brexit world

LONDON RESIDENTIAL MARKET
EU Referendum
51.9%
LEAVE
48.1%
REMAIN
71.8%
TURNOUT
REFERENDUM
Vote Tally

EU Referendum
IMMIDIATE ISSUES
POLITICAL
STABILISATION
BOND YIELDS
DEBT MARKETS
AND CREDIT
BANK
LIQUIDITY
INTEREST
RATES
CURRENCY

EU Referendum - What Happens Now?
1. Any Member State may decide to withdraw from the Union in
accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European
Council of its intention. In the light of the guidelines provided by
the European Council, the Union shall negotiate and conclude
an agreement with that State, setting out the arrangements for its
withdrawal, taking account of the framework for its future relationship
with the Union. That agreement shall be negotiated in accordance
with Article 218(3) of the Treaty on the Functioning of the European
Union. It shall be concluded on behalf of the Union by the Council,
acting by a qualified majority, after obtaining the consent of the
European Parliament.
3. The Treaties shall cease to apply to the State in question from the
date of entry into force of the withdrawal agreement or, failing that,
two years after the notification referred to in paragraph 2, unless the
European Council, in agreement with the Member State concerned,
unanimously decides to extend this period.
4. For the purposes of paragraphs 2 and 3, the member of the European
Council or of the Council representing the withdrawing Member State
shall not participate in the discussions of the European Council or
Council or in decisions concerning it.
A qualified majority shall be defined in accordance with Article 238(3)
(b) of the Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its
request shall be subject to the procedure referred to in Article 49.
• For the UK to leave it has
to trigger Article 50
• Formal unequivocal
declaration by the UK
Government
• Two year timescale for
negotiation
• Unlikely to begin until
informal negotiations
have begun

London Residential Market
So what does it mean for residential?

EU Referendum
UNDERLYING REASONS
people invest in London remain strong
London as a ‘safe haven’
Strong legal structure, asset
protection & multi-cultural society
Ease of global access with 4
main airports in close proximity
Centrally located between
Asia & North America
%
Population increase
Low interest rates
Robust economy
World class education
Favourable exchange rates
Favourable time zone

EU Referendum
EU referendum – Currency impacts
4/07/2016
USDtoGBP
25/06/2016
27/06/2016
16/06/2016
25/05/2016
15/05/2016
6/05/2016
26/04/2016
17/04/2016
8/04/2016
1.30
1.34
1.38
1.42
1.46
CURRENCY IMPACTS

EU Referendum
Economy remains robust
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
%
FORECAST
Source: Oxford Economics
ECONOMY REMAINS ROBUST

EU Referendum
Universities have real pulling power
0
1
2
3
4
5
0
50
100
150
200
250
300
350
400
London
Cambridge,USA
LosAngeles
NewYork
Chicago
Beijing
Oxford
Stanford
Cambridge
Princeton
TimesUniversityrankings:CombinedscoreinTop50
Combined score of top 50 universities Number of universities in top 50
Source: Times university rankings
UNIVERSITIES HAVE REAL PULLING POWER

EU Referendum
Population
50.0
52.5
55.0
57.5
60.0
62.5
65.0
67.5
70.0
72.5
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
UKPopulation(millions)
UK Historical and Projected Population
Population Projection, zero migration Population Projection, low migration (185,000 pa)
Population Projection, principal projection Source: ONS
UK HISTORICAL & PROJECTED POPULATION

Other Factors

EU Referendum
Still a favourable tax regime
0%
5%
10%
15%
20%
25%
30%
35%
40%
Hong Kong Singapore New York City Paris London Shanghai or Beijing
Buy (stamp duty) Hold (property tax / council tax) Sell (capital gains + VAT if applicable)
Source: CBRE research
STILL A FAVOURABLE TAX REGIME

EU Referendum
How global cities compare
Global connectedness
(GaWc)
Performance & Potential
(kearney)
Power (Mori)
London Alpha++ 60.1 1519.8
New York Alpha++ 63.1 1384.1
Paris Alpha+ 52.9 1307.9
Tokyo Alpha+ 46.3 1290.4
Singapore Alpha+ 37.6 1207.4
Hong Kong Alpha+ 43.1 1084.6
Sydney Alpha+ 31.9 970.1
STILL A FAVOURABLE TAX REGIME

So what does this mean for residential?

EU Referendum
New Build Sales
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2001-2006Average
Endof2007
Endof2008
Endof2009
Endof2010
Endof2011
Endof2012
Endof2013
Endof2014
Endof2015
2016Q1
Sales
Source: Molior
NEW BUILD SALES

EU Referendum
House Price Index
80
100
120
140
160
180
200
220 Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
AverageHousePriceIndex
(Base=Jan2007)
Prime Central London London UK Source: Land Registry
HOUSE PRICE INDEX

EU Referendum
Levelling off
80
90
100
110
120
130
140
150
160
170
180
Month1
Month3
Month5
Month7
Month9
Month11
Month13
Month15
Month17
Month19
Month21
Month23
Month25
Month27
Month29
Month31
Month33
Month35
Month37
Month39
Month41
Month43
Month45
Month47
Month49
Month51
Month53
Month55
Month57
Month59
Month61
Current cycle Apr-11 to Apr-16 Previous cycle Mar-04 to May-09 Source:Land Registry
LEVELLING OFF

EU Referendum
London Housing Supply – can we depict this in a nicer way?
0
10,000
20,000
30,000
40,000
50,000
60,000 1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
NumberofCompltions
Housing Completions CBRE Estimated Required Target New London Plan Target
LONDON HOUSING SUPPLY
can we depict in a nicer way?

EU Referendum
Global Residential Market
House Price Growth
Italy
3.8%
SouthKorea
11.3%
SouthAfrica
19.2%
Switzerland
37.6%
UnitedStates
53.2%
Denmark
58.2%
Spain
70.4%
Finland
82%
Netherlands
105.6%
Canada
133.9%
Norway
144.6%
France
149%
Belguim
174.4%
Ireland
185.5%
Australia
221.4%
UnitedKingdom
231.9%
Japan
-14.5%
Germany
-7.8%
GLOBAL RESIDENTIAL MARKET
House Price Growth

EU Referendum
Outperforms other assets
Decade 57.9 4.7 13.0 82.0 -44.8 84.7
Year -0.7 -4.9 -2.5 -10.4 -36.3 12.4
Commodities
S&P 500
Shares
FTSE 100
Shares FTSE
All Share Gold Brent Crude
London
Property
OUTPERFORMS OTHER ASSETS

Local Market Performance

EU Referendum
£0
£100,000
£200,000
£300,000
£400,000
£500,000
£600,000
£700,000
£800,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
SW8 London
LOCAL MARKET PERFORMANCE

EU Referendum
80
100
120
140
160
180
200
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
(Base=Jan2007)
Wandsworth London UK
LOCAL MARKET PERFORMANCE

EU Referendum
0
100
200
300
400
500
600
700
800
900
2009 2010 2011 2012 2013 2014 2015
NumberofsalesLONDON MARKET PERFORMANCE

EU Referendum
Local Market Perfomance
0%
10%
20%
30%
40%
50%
60%
70%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Wandsworth Southwark Lambeth
Unitsunderconstruction
Sold Unsold Proportion sold
Unit sales in schemes under construction
Proportion of unsold
completed stock
Wandsworth 2%
Lambeth 1%
Southwark 1%
Inner London 5%
Greater London 3%
LONDON MARKET PERFORMANCE

EU Referendum
CBRE House Price Forecasts
2016 2017 2018 2019 2020
5 year growth
2016-20
UK 3% 3% 4% 5% 5% 22%
London 5% 3% 5% 6% 6% 28%
Prime Central London 3% 4% 6% 6% 6% 28%
HOUSE PRICE FORECASTS

EU Referendum
Regeneration Premium
2.1% 5.7%
2.9%
6.7%
3.4%
8.5%
3.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
AverageAnnualGrowth
Local Authority Growth Regeneration Uplift
R
iverside
Q
uarter
Southbank
N
1
Islington
N
orth
G
reenw
ich
Paddington
Basin
Stratford
W
oodberry
Park
REGENERATION PREMIUM

EU Referendum
Infrastructure opportunity
Crossrail IINFASTRUCTURE OPPORTUNITY
Crossrail 1

EU Referendum
New Public TransportNEW PUBLIC TRANSPORT

EU Referendum
What do residents want?
CBRE Retail Survey
W h a t t y p e o f o u t l e t w o u l d y o u m o s t l i k e
To h a v e i n y o u r r e s i d e n t i a l d e v e l o p m e n t ?
Coffee shop/
Pastry
70%
54% 54%
44%
36% 34%
Supermarket Restaurant Wine Bar Convenience
Store
Delicacies
77%
Good quality retail had a
‘strong positive’ impact on
residential
91%
‘Convenience’ was the main
benefit of living around retail
83%
Important to have a
strong retail offering
65%
Preferred
independent stores
54%
Said retail would make a
development more appealing
RETAIL SURVEY
What type of outlet would you most like To have in your
residential development?

EU Referendum
What do residents want?
CBRE Amenity Survey
M o s t s o u g h t a f t e r a m e n i t i e s
Concierge
Have & use regularly
89%
Don’t have but would like
58%
Swimming Pool
28%
69%
Gym
46%
76%
WHAT DO RESIDENTS WANT?
Amenity Survey - Most sought after amenities

Recommended post Brexit U.K. real estate opportunities.
Television Centre
Televison Centre is at the heart of
the largest redevelopment in West
London.
Slated as the most iconic
redevelopment in London, Television
Centre’s apartments and penthouses
are at the centre of an enriching place.
With all-day cafés and restaurants,
television recordings and cinema
screenings, health club, pool and spa,
hotel,privategardens,andlandscaped
terraces with a programme of cultural
events.
Part of the multi-billion pound
regeneration in White City. It is a
milestone in the transformation of
145-acre White City, with £8 billion of
investment bringing more than 5,000
homes, a Harvard-style campus of
academic excellence, a media village,
an expanded Westfield shopping
mall and the largest-ever John Lewis
department store. Facilities include
the Soho House, screening rooms,
BBC live show studios, gym, spa, pool
and concierge service.
The Buckingham
Situated directly opposite the
Buckingham Palace, residents will enjoy
a centrality of location that few others
possess.
Located in St James’s Park and
directly opposite Buckingham Palace,
The Buckingham apartments enjoy a
centrality of location that few others
possess. They sit at the nexus of London,
surrounded by the best of British history,
power and culture. The open space
surrounding The Buckingham also
frames some of Europe’s most elegant
and beloved architectural landmarks,
broadest avenues and grandest Royal
Parks.
The development offers 1 bedroom to 3
bedroom options will all modern living
amenities as well as private access
apartments.
One Nine Elms
Soaring over 56 storeys into the sky,
One Nine Elms will offer its residents
unrivalled views of London’s most
famous landmarks, from The Shard
and the London Eye, to Westminster
Abbey and the Houses of Parliament.
All of the apartments for sale are linked
to a 5-star hotel with luxury amenities.
Residents will enjoy access to a 24
hour concierge, a spacious gym, pool,
spa and the 50th floor residents’ sky
lounge and terrace, a truly unique
space to entertain with London’s
skyline as your backdrop.
Right next door to Vauxhall
Underground station, with speedy
transport links into London’s West End
and the City, it is also walking distance
to the transforming 3km of London’s
riverside into an ultra-desirable
residential quarter, international
business district, and outstanding
cultural and leisure destination.
THE
BUCKINGHAM
Get in touch with the
Elysian team to find
out more:
Emaar Boulevard Plaza Tower
1, Suite 1602, Dubai, U.A.E.
+971 (0)4 278 3700
www.elysianglobal.com

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