POSTCARD FROM LONDON # 25 - Rule Britannia ?

“I’m changing valuers. My current ones have dropped the values by 20% but my new ones have dropped in by 40%. Who do I believe?”

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“In the US, it’s okay to give the keys back to the banks; but in Europe, it’s as though you’ve slept with their partner”

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“Hong Kong has not come back yet, unlike “surging” Singapore. But tourist numbers are increasing….”

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“Liquidity is truly key. If you need to sell you should be able to whatever the price - but in most office markets now, you simply can’t”

“Men of Harlech on to glory,

This will ever be your story,

Keep these burning words before ye,

Welshmen will not yield?“

And there was I (thanks to Mrs T, The Roast Beef Club and the Household Cavalry) at the first “Trooping of the Colour” for King Charles III. This year was the turn of the Welsh Guards, and it was a truly amazing experience.

This is the annual birthday parade of the British Army to present its battalion honours (a rather large flag) to the reigning monarch to reaffirm the bond between the monarchy and the army; and for both to commit to serve and protect the country.

It is not as political as a May Day parade in Moscow or anything you see in North Korea but for the tourist it is quintissentionally British.?This was the first for the King, but the tradition goes back hundreds of years as an example of Britishness or rather “British invention” and discipline.

But then the “British” bit is interesting.

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Sure, the Welsh Guards would think themselves Welsh first and British second, whilst the Scots and Irish Guards probably have differing views, but certainly not English.

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And as for their attire. Well, the guardsmen all wear bearskins hats which were, erm, originally stolen as trophies from the French during a battle two hundred years ago.

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The Life Guards Cavalry who protect the Monarch were originally founded in Belgium thanks to a short holiday after a civil war meant the monarchy having to operate in pre-Brexit days from Brussels.?

The music that the bands were marching to was written by an Italian and a German (who did live in London), the guns are American, the horses come from Canada and so on……...yes all are used for the “quintessentially British” occasion.

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In other words, take the best from elsewhere and use it to create a new paradigm in London.

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The same logic applies to the London real estate market. Forget what the Romans did for London, much of London would not have been built without overseas money. Battersea was built by the Malaysians, Canary Wharf by Canadians, More London by Kuwaitis, the Australians own Kings Cross (and Canada Water), and many of the towers both new and old are controlled by equity from Asian locations.

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And that’s before we talk about the vast swaths of residential and hotels owned by Chinese, Qataris, Saudi, etc. Not many Russians these days but there was a time….

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But what London does is provide a market which offers liquidity. Wherever I travel, whilst investors will always have a strong view on their domestic market, they will always want to know about London.

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They all follow the headlines, and they all want to be informed on what is happening. Right or wrong, they all need to have an opinion even if they are “inactive”.

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It is this truly global brand that excites.

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And so, in uncertain times, it is this fixation which should provide comfort to existing investors. Unlike some markets, there is always a price point where investment activity will start. In today’s bear market, this is yet to be determined, but for some groups, the fall in pricing is starting to look attractive.

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As my diary fills with meetings, I suspect this is a view that will be enhanced by the current visitations of Singaporeans, Hong Kong and Korean nationals, Canadian Pension Plans, Japanese Developers, Spanish Family offices, Indonesians, Guatemalans and from the latest deal in the City, the Vietnamese.

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This is global Britain at its best.

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So, as I write, Wimbledon is underway, and London is a festoon of green and purple; littered with Landrovers taking tennis players to and from the tournament. Sales of Pimm’s and strawberries are in overdrive and summer evenings are spent watching the gladiatorial tournament.

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Another British brand and yet another example of “a quintessentially British” occasion.?So quite predictable really that most of the local players have been knocked out -?oh well.

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Stay safe, particularly those in sunny climes!

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Andrew