Investing in super-prime | Rory Penn, Knight Frank

You have carved yourself an incredible career within the property sector, what is it about this industry that you’re drawn to and if you had to choose another career path, what would it be?

I’ve always been interested in real estate. I initially thought I wanted to be a developer, and started my career in commercial fund management and private equity real estate. Having a slightly unconventional route to my current role in residential and exposure to different sectors of the market has been hugely beneficial to me as I have progressed in my career. What I’m most drawn to is the fact that the industry is all about people, communication and connections - and it never stands still! If I had to choose another career path (which I don’t want to!), it would likely be in an industry with a global spin to it, potentially venture capital.

‍What is your favourite part of your job?

I’ve been lucky enough to work on some extremely high value property transactions at the top end of the market in London, which is always exciting.. Having the opportunity to meet and build relationships with clients with both residential and commercial assets across the world is definitely another highlight. I have to say, my favourite part of the job is overseeing and building our network of fantastic, entrepreneurial agents across London. My aim is always to work with great people and try to add value to the team; luckily I’m surrounded by the best in the business!

Which is your favourite area of London and why?

A difficult question! Having worked across so many areas, I love how each borough has its own distinct atmosphere, for example Notting Hill’s village-feel, Mayfair’s enduring grandeur, to newly regenerated areas such as Bayswater that bring a fresh identity to a previously overlooked part of town. London is always evolving and it’s thoroughly exciting to be a part of the property industry here and see what’s next. If I had to pick one area – it would be Chelsea.

You achieved some impressive numbers last year, with over £3.5bn in London re-sales and over 1,150 transactions, all whilst navigating some choppy waters. With the UK now in recession and an impending election, what are your predictions for the market this year?

It is a difficult year to forecast and budget for. The UK is not out of the woods, either economically or politically with 2024 likely to be a year of contrast, underpinned by ongoing uncertainty with emerging opportunity. Our research team forecasts growth in prime London markets over 5years, although we face market risk with the general election this year. We expect prime central London (PCL) and prime outer London (POL) to under perform the wider UK market this year. Given that prices in PCL are still 17% lower on a nominal basis than their peak in mid-2015, we believe growth will kick in more fully from next year.

The big picture for the UK is that sentiment will get better as debt markets loosen, with banks competing for private client business. Affordability ratios will improve as real wage growth continues, combined with reducing interest rates. With more than 2 billion adults in 50 countries going to the voting booth in 2024, we know that change is on the horizon, however I suspect that much of this political uncertainty is already priced in.

Liquidity will increase, but not to the level that many are hoping for. Pricing and access to Grade A buyers remains essential as the market looks to bridge the gap between buyers and vendors.

We have seen a surge in the use of social media for properties, attracting the attention of many. Although they may gain followers, how successful is this medium in realising sales?

Social media is a valuable tool which undoubtedly will be part of our industry’s future, however it should not be relied upon over proactive agency and providing the best advice to clients. There is a lot of noise and a huge volume of content being produced across the market, which poses a risk of it becoming oversaturated. Ultimately, we know that people sell property, so ensuring that we excel in the basics of communication, building strong relationships with our clients and delivering results is paramount. Social media should therefore be a part, but not the whole, of any marketing campaign for a property.  

In terms of locations, you speak about the fantastic team that help you manage your offices in various markets across the globe. Which markets are you most excited about at the moment and why?

Wealthy individuals are now better connected and more globally mobile than ever before, and we are seeing emerging wealth hubs challenging the long-established stalwarts, with new incentives to attract the world’s wealthy.      

According to the latest edition of The Wealth Report, looking ahead over the five years to 2028, Asia’s wealthy population is set to grow faster than any other region in the world. Singapore is seeing success in attracting emerging wealth from Indonesia, Thailand, Malaysia and Vietnam, so this is certainly one to watch. It will also be interesting to see how the Hong Kong market picks-up over the next year with recent announcements that are set to restore its status as a global financial hub. India is also set to be a significant market to watch over the next few years with a vast amount of wealth expected to be created.

Closer to home, it will be fascinating to see how the reforms and incentives in European cities like Paris and Milan will impact the movement of ultra-high-net-worth individuals

Of course, we can’t forget the long-established global hubs of London and New York, which remain closely aligned and in my opinion, are offering good value. Prices in both cities dipped around 2% in 2023, presenting a strong opportunity for prospective buyers. In the US, an increasing focus on convenience and security is bringing branded residences to the fore. For us in London, the capital’s status as a global wealth hub remains unchanged, despite Brexit and some of the headlines you might read. We registered over 13,000 new direct buyers in London in 2023, as well as transacting with buying agents.

What is your advice to anyone who may be looking to extend their current portfolio, and how can Knight Frank Private Office help them in their search?

With the scope of investment opportunities becoming ever greater, I would encourage anyone looking to invest into real estate to ensure they have the right advisor in place to assist them.

Knight Frank’s Private Office is committed to providing clients with the right advice to take advantage of these opportunities. Truly global, our London Private Office HQ is supported by offices in New York, Dubai, Monaco, Singapore and Hong Kong. As a fully-integrated residential and commercial real estate advisory team, we help clients transact across the Knight Frank network, whether that be buying a prime residence in London, selling a villa in the South of France or investing into commercial capital markets in Europe, Asia or the US. Clients benefit from one dedicated advisor who has access to on and off market opportunities across the world.

‍Rory Penn‍

Partner, Head of London Residential Sales, Knight Frank

W: Knight Frank‍

L: Linkedln‍

IG : rorypenn_kf