Post-Brexit opportunities for global investors

As property developer Richard Carr predicted, much of the post-Brexit gloom is lifting and many markets are predicting positive outlooks heading into 2017.

Global appeal

Richard Carr on post-brexit opportunities

Brexit looks set to offer new opportunities

The fluctuations in many markets following the UK’s decision to leave the European Union are beginning to right themselves with the real estate market uncertainly appearing to be shorter lived and less severe than many investors first feared, according to new analysis.

LaSalle Investment Management’s mid-year Investment Strategy report said that the correction in real estate pricing is expected to be largely restricted in the next 18 months, whilst medium term capital inflows into real estate will only be interrupted, not reversed.

Also, besides from the country’s slightly unclear political landscape, given the UK’s ultra-low interest rate and bond yield environment, real estate yields are only expected to increase by 40 to 50 basis points by the end of 2017.

Over estimated

In conclusion, the report suggested that some of the fears surrounding the real estate market in relation to Brexit may have been overdone.

Also, real estate assets with long, index linked leases are likely to outperform over the next year years, whilst the predicated capital market re-pricing will lead to an opportune time to enter the UK market especially for US dollar denominated and Japanese yen denominated investors.

“Across the globe, the fundamentals of supply and demand appear to be well-balanced going into the second half of the year in most of LaSalle’s major markets,” said Jacques Gordon, Global head of research and strategy at LaSalle.

“Furthermore, turmoil in capital markets might also open higher yielding buying opportunities from distressed sellers as the implications of the Brexit vote in the UK ripple around the world.

“Although the UK has been the epi-centre for political and financial tremors since June 24, the law of unintended consequences suggests that investors should also closely watch for ripple effects in the EU, North America and even all the way to Asia-Pacific,” he added.

Prospects

Richard Carr strongly believes that the current prospects for the UK outside of the European are far more positive than what many market commentators are willing to predict.

He expects 2017 to be a strong year for the country with currency bouncing back and an increase in foreign investments.