London property developer Great Portland Estates (GPE) has expressed a cautious view of the market in the capital as it published its results for the year to the end of March 2018.
The company said many vendors are holding out for excessive prices for low-value investments across the capital, which means such prospects are not worth pursuing at present. It said this is particularly true in light of the Brexit-related economic uncertainty.
As a result, GPE is focusing its energies on a trio of new developments located in close proximity to Crossrail stations across the capital.
The company is spending £240 million on these developments, which are based at Hanover Square over Bond Street station, Oxford House near Oxford Street and Cityside House, which is between Aldgate and Whitechapel stations.
It has already started on the Cityside project, with the existing building undergoing demolition. When work on the project is finished next year it will feature 74,700 sq ft of grade A office and retail space.
Oxford House is also due for demolition and will be replaced with a mixed-use facility featuring 116,000 sq ft of office and retail space, which will be ready in late 2021. The reconstruction job will raise the amount of available space at the site by 30 per cent.
Hanover Square will be the largest of the trio, comprising 167,200 sq ft of office space, 41,900 sq ft of retail and catering, plus 12,200 sq ft of residential space.
GPE stated that the focus on specific locations that are best-placed for economic growth such as developments near new transport links offer the safest investments at present.
Such a rationale may also apply in other cities too, such as Birmingham.
Kuwaiti investor Salhia Investments recently confirmed a £140 million investment in a project that will include the tallest office building in the city.
Deputy chief executive officer of Salhia Abdulaziz Al-Nafisi said the 30-storey tower in Digbeth represented a strong prospect because it is near where the city's HS2 station will be built, as well as the government's Midlands Engine project.