Brexit | Research & Forecast Report

We are pleased to share with you, our latest commentary on the EU referendum and its short term impact on UK commercial property - the next leg of the journey.

The post referendum landscape continues to shift unpredictably as businesses and investors grow impatient for the unveiling of the UK ‘Brexit’ plan. Do not look for anything conclusive until mid-December when the Prime Minister presents the thinking at an EU summit. The odds that the Article 50 button may be pushed early in 2017 are increasing. I mean this figuratively, not literally, as the bookmaker odds did not help us much in the run up to the referendum.
The initial impact on property has been remarkably modest, especially given that the UK market was already considered by many to be vulnerable to ‘late cycle risks’. Transactional evidence remains scant and so sentiment is driving views. Occupier markets look remarkably stable UK wide. Domestic operators are not postponing decisions. It is too soon to say whether internationals share this confidence, although a few high profile votes of confidence are at hand or in the making.
The risks are numerous though and not just to the UK. The EU’s political structures are about to be tested with an Italian referendum, a hung Spanish parliament, and Dutch, French and German elections next year. Meanwhile, the US political system is braced for the unexpected. Early indications are that despite a vote to leave, the UK is still a safe haven and may prove to be a net beneficiary of capital flight from both uncertain EU countries, but also the US where political risk has the potential to encourage foreign investors to divert funds to other markets.

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