Foreign money seeking a refuge from wider economic difficulties has been key to the increase in prime central London property values in recent times so it seems, but Sushila Pindoria, senior associate, believes that this refuge also extends to the elite number of wealthy bankers looking for a safe investment for their hard earned city bonuses.
Sushila says it would be interesting to see when and if "the bubble will burst". With the recent London riots bringing turmoil to the city and the increasing number of redundancies especially in the banking world, the bubble may burst sooner than we expect. On the up side, we have the London Olympics which can only have a positive impact on the future investment by foreigners in London.
Interestingly, from a landlord's perspective, Sushila advises that when granting leases to foreign compnaies, landlords must consider not only the covenant strength of the proposed tenant, but also whether the relevant foreign law permits the tenant to enter into the lease. Landlords would benefit from taking a risk averse approach here and seeking from the tenant additional security by way of a rent deposit or a UK bank guarantee.
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