Why location is such an important factor for inward investment?

For any company looking to set up, relocate or expand abroad, finding the right place to base their operations is crucially important. As part of the comprehensive service it offers, UK Trade & Investment frequently teams up with service providers – like commercial property experts Jones Lang La Salle – to ensure that companies looking to ‘inward invest’ in the UK get the most professional and up-to-date information and advice.

Vanessa Clark, a national director for Jones Lang La Salle, sets out her view of what is currently happening in the UK commercial property market.

“The last few years have generally been very successful ones,” she says. “The markets have been recovering from the events of 7/11 which effectively put a brake on inward investment, but since then, the markets have lifted and improved. The commercial property market throughout the UK looks fairly solid, and large areas of the UK are currently being regenerated in and around Manchester, Leeds, Birmingham and Liverpool, plus we’ve seen general growth throughout the UK.”

Does she see the ‘credit crunch’ - related to problems in the US sub-prime mortgage markets – affecting the market in the UK? “We are definitely all watching and waiting to see if it going to be more of an issue – we will know more once we have the results in for the first quarter of 2008,” she says. “In the meantime, it has dented the investment markets a little, causing a readjustment in yields and performance.

“However, vacancy rates in the West End, City of London and Canary Wharf are very low in fact supply is at its lowest level since 2001 across Central London and demand is at its highest level. With rents in established hot spot areas like Mayfair now up to £147 per square foot, a trend is emerging with companies facing rent reviews and lease expiries now looking outside these more traditional areas to get better value.

“It’s a definite trend, with companies like Cadbury Schweppes and Sainsbury’s, to name just two, looking to move out from the centre altogether or, to up and coming areas in Greater London that have good transportation links – such as Kings Cross, Paddington, Docklands and Croydon. And the growth areas aren’t just in the South East.”

Why is location such an important factor for inward investment? “As well as looking at rents and transportation links, companies also need to be thinking about whether they will have access to skilled labour, housing, schools and amenities; whether there will be development grants available; and what the prospects are over the long term. Economic drivers, such as the forthcoming London Olympics are having a positive impact in stimulating new transport provision and regeneration.” says Vanessa.

“Jones Lang La Salle will work in tandem with organisations like UK Trade & Investment, to provide a balanced view and to pull all of this information together for our clients. We’ll give them a detailed overview of an area, while UK Trade & Investment will be able to provide information about government policies, grants and other links to inward investment.”

Jones Lang LaSalle, in conjunction with UK Trade & Investment, have explored the inter-relationship between inward investment and the UK property market via a survey of inward investors and intermediary advisers. This report provides a summary of the key findings.

What advice does Vanessa have for companies thinking about investing in the UK? “I would advise them to get expert property consultancy advice,” she says. “And also to really think about what their priorities are before they decide on the location.”