When I visited London a couple of weeks ago, I was surprised by the buzzing feeling and action there were. People were busy and the atmosphere was positive. Greetings also to the start-up and growth companies I met there!
This city is now a place where big real estate companies are heading. For example the India´s biggest real estate developer has announced that they are developing new buildings in London. And the real estate prices are showing upward trend. For example Financial Times reported that in Mayfair several luxury flats have been sold with new record prices. And new flats and blocks are on their way.
The reason why this is happening is partly because the pension funds are rising their asset allocation in real estates. Pension funds are seeking long-term investments and London properties are one of the metropolis in the world that are looking attractive for many investors. Also the oversees funds like Canadian pension fund Ontario Fund have landed to the European real estate market and they are expecting to invest several billion euros in the properties.
Investors are looking for good returns with third-party rating systems like LEED, which is widely used in office buildings globally. But there are also other systems and some banks have developed their own property rating methods. These systems analyse for example the technology level of the building, energy efficiency and environment issues as for example health and wellness issues.
The tightening energy efficiency legislation drives also investors to focus more on ESG issues. Green Buildings offer good rental yields, cost savings and higher premiums in sale. ESG-factors also help investors to mitigate regulatory, market and physical risks related to properties.
So, it is not surprise that investors also want to learn more about BIM (Building Information Modelling) in order to make better real estate investment decisions. This system helps all building stakeholders like architects, designers and project managers to work together. The costs savings in time and resources are remarkable.
And maybe we also see more modern wood houses and flats in the future. This is absolutely the trendiest thing at the moment.