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TIMES, THEY ARE A CHANGING…

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TIMES, THEY ARE A CHANGING… 5

Students represent 41% of PCL tenancy start-ups whilst financial professionals fall to lowest level.

The increasing importance of the international student sector in Prime Central London (PCL) has been confirmed, as London Central Portfolio publishes its results from their annual lettings audit.

Rental of apartments in PCL’s most exclusive neighbourhoods by finance professionals, historically the mainstay of the market, stalled during the credit crunch when employment in the sector fell by around one third. Taking up the slack, the numbers of independently wealthy foreign student renters has been increasing, with their share of the sector doubling from 12% to 29% between 2006 and 2012. This momentum has continued, seeing students representing the largest number of new tenancy starts at a staggering 41% in the last 12 months. There has been a corresponding decrease in new tenancy starts from finance professionals, falling to 21%, the lowest on London Central Portfolio’s records.

TIMES, THEY ARE A CHANGING… 6According to LCP’s tenancy records, the rental sector in PCL has seen a marked recovery with a 6.2% increase in rents for brand new flats in the last 3 months. For re-lets, there has been an increase in rents, in line with the rate of inflation, the first time the market has seen an increase in the last five quarters. Again, students have made an important contribution to this rebound – not only are there more of them, increasing the competition in the market – but they have deeper pockets. Students are outbidding the corporate sector for properties, paying £600 a week for a flat, 7% more than the average market rent of £562.

“The increase in student renters in PCL should be no surprise. Westminster houses three of the best universities in the world; Imperial College, University College London and LSE, and sees 100,000 students visiting a year. London has become a magnet to these privately wealthy young adults who are looking for top quality accommodation to go with their top drawer education. With 82% of affluent Chinese families currently planning to send their children to study overseas, this importance of this sectors looks to be going from strength to strength.

“Even as financial markets recover, landlords are increasingly buying into the concept international student tenants. Many have experienced a sophisticated lifestyle: they treat properties with the same care are corporate tenants but the wealth underpinning them is stronger. This means they can often outbid professional tenants, offering higher rents, often a year upfront, as parents are keen to install their children in the best, most secure homes” comments Naomi Heaton, CEO of London Central Portfolio.

This however has led to an increased seasonality in the market. Some students will only be renting for an academic year, which contributes to the higher level of new tenancy starts ups by the student population. On the other hand, tenants from the financial sector may extend their tenancies and stay put for a number of years, which remains attractive to a landlord. However, there is always a huge influx in enquiries during August and September for students, replenishing the tenancies.

LCP’s audit also reveals a surprising return of British tenants to PCL as economic sentiment and consumer confidence has bounced back. They have taken up 13% of properties in the last 12 months, the largest single nationality. British corporate tenants from a range of employment sectors have been considering PCL again. There are also a whole eclectic mix of British tenants such as entrepreneurs and retired couples wanting to experience the London lights and pensioners studying for their PHD. They have taken pole position from the French, last year’s highest, as they fled from Francois Hollande’s punishing tax regime. This year, as a whole, the most tenancy starts, 30%, have come from Western Europe.

TIMES, THEY ARE A CHANGING… 7Further data compiled by LCP’s indicates that the market is shifting to smaller one bedroomed units, which have become the hardest working sector, achieving the highest level of average weekly rents at £1.08 per square foot. Most tenants are singles or duos. This reflects both the fact that Central London is a young “go-to” destination where 40% of residents are between 20 and 39 years old and corporate high achievers come over as singles of couples. It also reflects the growing importance of the international student community who generally come over on their own and do not share unless they are with siblings.

“The dynamics of the private rented sector have clearly shifted in Central London. To optimise their returns, it is important for landlords to recognise and adapt to the changing landscape” concludes Heaton.

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Oil rises on positive forecasts, slow U.S. output restart

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Oil rises on positive forecasts, slow U.S. output restart 8

By Bozorgmehr Sharafedin

LONDON (Reuters) – Oil prices rose on Tuesday, underpinned by the likely easing of COVID-19 lockdowns around the world, positive economic forecasts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut down crude production.

Brent crude was up 36 cents, or 0.5%, at $65.60 a barrel by 1212 GMT, and U.S. crude rose 39 cents, or 0.6%, to $62.09 a barrel.

Both contracts rose more than $1 earlier in the session.

“Vaccine news is helping oil, as the likely removal of mobility restrictions over the coming months on the back of vaccine rollouts should further boost the oil demand and price recovery,” said UBS oil analyst Giovanni Staunovo.

Commerzbank analyst Eugen Weinberg said optimistic oil price forecasts issued by leading U.S. brokers had also contributed to the latest upswing in prices.

Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously, and $75 in the third quarter from $65 forecast earlier.

Morgan Stanley expects Brent crude to climb to $70 in the third quarter.

“New COVID-19 cases are falling fast globally, mobility statistics are bottoming out and are starting to improve, and in non-OECD countries, refineries are already running as hard as before COVID-19,” Morgan Stanley said in a note.

Bank of America said Brent prices could temporarily spike to $70 per barrel in the second quarter.

Disruptions in Texas caused by last week’s winter storm also supported oil prices. Some U.S. shale producers forecast lower oil output in the first quarter.

Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday.

A weaker dollar also provided some support to oil as crude prices tend to move inversely to the U.S. currency.

(Reporting by Bozorgmehr Sharafedin in London, additional reporting by Jessica Jaganathan in Singapore; editing by David Evans and John Stonestreet)

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UK-Japan trade deal settled nerves for Japanese firms, Honda executive says

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UK-Japan trade deal settled nerves for Japanese firms, Honda executive says 9

LONDON (Reuters) – Britain’s trade deal with Japan settled the nerves of a lot of Japanese businesses in the United Kingdom and gives them confidence about their future prospects there, a senior Honda executive said on Tuesday.

Japan, the world’s third-largest economy, has since the 1980s made the United Kingdom its favoured European destination for investment, with the likes of Nissan, Toyota and Honda using the country as a launchpad into Europe.

But Britain’s shock 2016 decision to leave the European Union had prompted Japan to express unusually strong public concerns. Their companies and investors warned that a disorderly exit from the EU would force them to rethink their four-decade bet on Britain.

“We welcome very much the Japanese trade agreement which as a Japanese businesses was very welcomed,” Ian Howells, senior vice president at Honda Motor Europe, told a parliamentary committee.

“On the point around confidence, that certainly amongst my peers in Japanese companies was very much welcomed, and probably settled a lot of nerves in terms of their trading prospects in the UK going forward.”

Britain and Japan formally signed a trade agreement in October, marking Britain’s first big post-Brexit deal on trade. It has also made a formal request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Japan is also a member.

(Reporting by Kate Holton)

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UK retailers see sharp fall in sales and mounting job losses, CBI says

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UK retailers see sharp fall in sales and mounting job losses, CBI says 10

LONDON (Reuters) – British retail sales fell in the year to February as stores cut jobs at a rapid rate, with only supermarkets reporting any growth during the latest COVID-19 lockdown, a survey showed on Thursday.

The Confederation of British Industry’s gauge of retail sales stood at -45, up only slightly from January’s eight-month low of -50. The measure points to falling sales and is below the consensus forecast of -38 in a Reuters poll of economists.

Retailers’ expectations for March – when non-essential shops will remain closed to the public as part of lockdown measures – fell to -62, the lowest since the series began in 1983.

In another sign of a changing consumer habits during lockdown, the survey’s gauge of internet retail sales hit a new record high.

“With lockdown measures still in place, trading conditions remain extremely difficult for retailers,” said Ben Jones, principal economist at the CBI.

“Record growth in internet shopping suggests that retailers’ investments in on-line platforms and click-and-collect services may be paying off, but the re-opening of the sector can’t come soon enough to protect jobs and breathe life back into the sector.”

Job losses among retailers accelerated according to a quarterly question in the survey. For the distribution sector as a whole, which includes wholesalers and car dealers, employment fell at a record rate, the CBI survey showed.

(Reporting by Andy Bruce, editing by David Milliken)

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