The chief executive of AIM-listed Aukett Fitzroy Robinson (AFR) has predicted a surge of investment in London from French tycoons fleeing the country’s rocketing millionaire tax
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Nicholas Thompson was speaking to the AJ following the announcement that his company was back in the black after posting a half-yearly pre-tax profit of £173,000 – reversing a £761,000 loss for the same period in 2011.
The head of the top-ranked AJ100 company said: ‘The London market is being buoyed by the continuous investment of overseas money. We’ve had the Russians and Greeks.
‘The 75 per cent tax rate on millionaires in France will result in the next [investment] push into London, forcing up the residential prices.’
He added: ‘That’s important because a lot of offices are being converted into residential units, effectively reducing the office supply – particularly in the West End.
‘This will force up rents - even though we are in an economic downturn.’
Although the practice returned to a profit, the its turnover fell during the six months to the end of March, compared to the previous half-year ending September 2011. Revenue dropped from £9.2 million to £5.4 million. The UK market showed the biggest decline, with income falling by almost half to £2.7 million.
Thompson added: ‘The UK market is quite subdued. In the AJ100 you’ll see a large proportion of practices with a similar turnover, meaning the marketplace is very crowded.
There is not enough work to go around for everyone in the UK
‘There is not enough work to go around for everyone. However, euro-land is not the place to go. That market is very patchy and there is competition from the local practices.’
AFR has had an office in Russia since 1989 and the country continues to be a strong market for the firm.
‘There was a quasi-freeze on development work in Moscow about a year and a half ago. ‘But we have lots of work as a result of the 2014 Winter Olympics in Sochi, on the Black Sea.
‘I don’t see the Russian market going backwards unless there is a significant and sudden drop in the price of oil. Our next focus in the country will be the 2018 World Cup.’
He added: ‘With regards to the Middle East we made the decision to hold our position in the UAE, but we only made £8,000 there in the year ending September 2011. We were down to just an outpost, but now we are back to about half a dozen and we will be getting back up to 10 after Ramadan.
‘The priority for Abu Dhabi, which was funding Dubai, wasn’t building projects. Now money is being released again – especially for infrastructure – and the engineers seem to be doing quite well.
‘Funnily enough, it might be Dubai that comes back first albeit at a lower volume. It was the first to go and there is now there is a quite a good property “recycling” industry there.’
French money heading to London, predicts AFR chief