London has seen in increase in financial investment from overseas since the end of 2022 and became the biggest recipient in Europe at the end of last year, according to a survey by the London Property Alliance (LPA), the body which represents the capital’s largest property developers and investors.
The upturn in “direct foreign investment” (FDI) in the city, which includes companies relocating to London as well as a property transactions, has coincided with declines in Paris – London’s closest peer in Europe – New York, Berlin and Hong Kong.
Examples have included a £400 million input into Canary Wharf by private equity group Brookfield and the Qatar Investment Authority, one of 103 FDI projects established in London during the third quarter of 2023 – 14 more than at the back end of 2022.
A City Hall analysis has found these initiatives to amount to £13 billion in capital expenditure and business growth agency London and Partners has reported a 40 per cent annual increase in the number of jobs created in the capital by FDI.
The LPA survey says that by comparison Paris has been “particularly affected by a wider European slowdown in FDI” resulting in only 20 such projects being attracted in the third quarter of 2023. New York’s has stayed much the same at around 40 to 50.
The survey, compiled by Jon Tabbush and Zarin Mahmud of think tank Centre for London and LPA chief economics adviser Alexander Jan, also found that total foreign investment into London’s climate tech sector last year was “a staggering 77 per cent higher than in 2022”, leading to a three-fold increase in jobs in that field.
Less encouraging is the survey’s finding that “air pollution in London is rising fast”, reaching its second highest level of 2023 in November. “The capital’s air currently has more small particulate concentrations than any of our other [surveyed] cities, at least half of which are caused by road vehicles, despite the extension of the Ultra-Low Emissions Zone earlier in 2023,” it says.
None of the cities covered by the survey have air quality that complies with World Health Organisation guidance and it is noted that New York, following years of debate, has just implemented congestion chrging for the first time.
The survey also examines economic output and employment, together with completion rates of new homes in 2022, noting that London’s, New York and in particular Hong Kong’s all fell compared with 2021. The trend expected to have continued in 2023.
In his introduction to the survey, LPA chief executive Charles Begley highlighted the “notable impact” of interest rate hikes and global inflation and London coming top compared with the other cities surveyed in FDI, prime real estate and housebuilding but having “underperformed on output growth and job vacancies”.
Read the survey in full here.
Dave Hill is editor and publisher of OnLondon.co.uk. Support the site and its writers for £5 a month or £50 a year and get things for your money too. Details HERE. Threads: DaveHillOnLondon. X: OnLondon and Dave Hill.