predicts that share prices for leading
U.K. property companies and funds will
not only recover, but find more rational
investment levels following the intense
run-up on values over the past half dozen years.
“Many commentators,” Danks said,
“have long predicted that an adjustment in pricing at the top end of the
investment market, particular in Central
London — across all property sectors —
was long overdue.”
In addition, given the low interest rate
environment that is likely to endure for
the foreseeable future, Danks expects
an increase in merger and acquisition
activity from major international companies. He further pointed to Marillyn
A. Hewson, Lockheed Martin’s chief executive, who recently commented that
exporting from the U.K. could become
more attractive, with Lockheed already
seeking the U.K. as a place to invest.
Consumer Confidence is
These real and significant economic
scenarios notwithstanding, LeMarechal
contends that consumer confidence
will be the ultimate barometer of U.K.
stabilization. She posits that the change
in currency rates post-Brexit will likely
make the U.K. more accessible and thus
attract visitors, with hotels and eateries
in tourist areas seeing the benefit, which
in turn, could boost real estate values.
“But it remains too early to tell how consumers and businesses will feel about
their long-term prospects,” she said.
With copious sources of capital globally seeking a place to land as the U.K.
market reconfigures, industry leaders
anticipate an even greater investment
emphasis into the U.S. real estate markets. The Brexit impact is extending to
other countries as well.
“On the positive for the German
real estate professional, our industry will profit,” said Thorsten Wolf,
SIOR, Prokurist, Berendes & Partner
Consulting GmbH, Hamburg. “Cities
like Berlin and Frankfurt are likely to
see a higher influx of foreign companies making investments, pushing up
rents and demand in the German office
and industrial markets. The first clear
indications are already emerging.”
Time, indeed, will provide more clarity.
But with the summer months coming
to a close, the industry consensus is
that starting in September, we will
start to see whether the dire predictions of Brexit will come to pass.
Danks, for one, sees reason for optimism, pointing to the £ 67 billion
invested last year in the U.K., one of the
world’s most stable, highly developed,
and best regarded property markets.
“It is therefore highly unlikely to collapse,” he said. “Adjustments will be
made for sure, but perhaps that is not
such a bad thing.”
However events unfold, it’s clear that
the Brexit vote has forced significant
issues to the forefront, presenting
both challenges and opportunities.
As LeMarechal said, “it’s too early to
call,” but given the inherent nature of
real estate markets — and the nearly
unprecedented amount of global investment capital looking for a place
to land — the U.K.’s decision to leave
the E.U. may slow some activity in the
short term, but trigger new deals and
agreements far sooner, and with more
efficiency, than the pundits initially
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