The Games are also about brand London

To the disappointment of many UK commentators, the site has been developed ahead of time, and I am looking forward to four remarkable weeks of Olympic and Paralympic sport.


13 July 2012

Olympic competitors flags on Regent Street

To the disappointment of many UK commentators, the site has been developed ahead of time, and I am looking forward to four remarkable weeks of Olympic and Paralympic sport.

Londoners wait with excitement and apprehension: excitement at playing host to the world; apprehension at the impact on daily lives. During the games, property transactions will no doubt fall, alongside my chances of an uninterrupted commute.

But at The Crown Estate, it is business as usual, except for James Cooksey, who heads our St James's and regional portfolios, and David Shaw, who is in charge of our Regent Street assets. They will be setting up camp beds side by side at New Burlington Place like a real estate Morecambe and Wise.

The games' positive impact on London will be significant and long term. This is not just about the cultural benefits or the regeneration of a swathe of east London. It is also about a less tangible concept: brand London.

London will be host to 15,000 sports and 6,500 non-sports journalists. The stories these reporters tell about our city will echo across the globe.

For the property industry, this impacts on the complex web that determines the capital's attractiveness to tourists, investors, retailers and office occupiers.

London already starts from a position of strength, as it continues to buck the economic trend. In the retail market, there remains significant unsatisfied demand.

Our retail voids have been at zero for some time, and many international brands are still not represented in London.

Wider business prospects are also good. London is expected to generate between 100,000 and 200,000 additional jobs in finance and business by 2020. In the short term, the sluggish economy and global financial uncertainty are depressing demand from office occupiers.

However, this is balanced by a continuing lack of supply of new-build and refurbished space, particularly with large floorplates. This has been reflected in the success we have had attracting corporate occupiers to our new AirW1 office space in Quadrant 3.

Looking at the present development pipeline, we do not expect a rapid expansion in the supply of new office or retail space in the West End. Our long-term focus on central London, home to more than half our £8bn capital value, continues to make sense.

The impact of the games will be long term. They are part of a story to positively position London's cultural heritage, public realm, safety, accessibility, transport and business attractiveness in the eyes of the world.

For me, this is particularly important after last summer's riots.

It is also worth remembering that the tide of history ebbs and flows. Just as London has enjoyed economic advantages over the last few years - "safe haven" status and a relative currency advantage to name just two - this can drift away because of events outside our control. And with pricing in the capital market dependent on a very positive view of London's future prospects, property owners should take full advantage of the Olympics opportunities.

The Crown Estate is playing its part, shouting: "The West End is open for business", from the roof tops. Regent Street and St James's are welcoming the world with the flags of all 206 competing nations. Quadrant 3 is hosting the London Media Centre Regent Street, which will provide visiting journalists with a full-service facility to work from and explore the area.

So, will the games affect David and James's already creaky backs? Yes. Will they influence our market decisions, strategy or approach to investment? No, but their impact is more than complementary for a business with a strong focus on long-term investment in the West End.