UK commercial property experiences recovery after Brexit slump

UK commercial property experiences recovery after Brexit slump

Demand for commercial property in the UK has started its recovery after its post-referendum slump due to new interest from British business as well as foreign investors taking advantage of the weak pound.

In July, several major property funds halted their investors from withdrawing their investments, which turned the sector into the most visible casualty of the Brexit result.

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RICS Chief Economist Simon Rubinsohn said a rebound in demand for property by firms seeking space for their operations showed the economy was proving resilient, at least for now.

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Net occupier demand increased by +12 between late September and early October, a rise from zero in July’s statement but still remains below pre-referendum levels. Investment demand also saw an increase after a record fall previously, mainly helped by foreign investors cashing in on the weak pound.

“Overseas buyers look to capitalise on the opportunity to buy prime assets, given the significant discount provided by the weak pound.”

Whilst for foreign investors interest in commercial real estate in central London grew, British businesses appeared more sceptical towards investments in the capital or Scotland.

“Anecdotal evidence suggests that political uncertainty is still having an effect on both these markets.”

Britain is due to begin its two years of EU exit talks early in 2017.

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