EU - UK Real Estate Growth Driven By Liquidity During Brexit

UK Real Estate Market

The management and banking firms in the EU are planning new strategies for location shifting during Brexit. In addition, many money market funds are searching for new offices and hiring people in the new locations as the firms suspect more heightened upheavals in the money market in the post-Brexit phase. 

There are uncertainties related to current real estate strategies as changing political and economic factors can be complex, especially due to delays in negotiations. However, even during this phase, the investment in UK properties continues to grow as there are abundant opportunities in the UK and European real estate markets.

Investors are targeting urban residential and official spaces, and the European market is getting capital investment in logistics and office spaces. The sale of property increased in Spain by 27 per cent in the first part of 2018, where buyers are mostly from Britain, France, and Scandinavia.

The Spanish cities Costa Brava, Marbella and Ibiza, are constantly growing. The investment in Barcelona was high in the last years but has dipped compared to new-fangled coastal cities. 

Singapore Company Ascendas REIT is buying at least 12 logistics spaces for $272 million in the UK. In the last two years, Singapore invested more than $6 billion in warehouses in the EU, and such logistics opportunities are the most sought-after properties by foreign investors. In addition, several Southeast Asian investors are buying in the EU and Australia. 

Chinese Buyer's Investments In Property

In the last few months, investments from Chinese buyers declined, but new investors from Korea and Singapore are getting office spaces in London and other growing regions of the UK and EU. 

North American investors are buying commercial properties outside London. The new data from the Datscha show that investors from Canada and the US spent more than 3.5 billion US dollars in the market in the first half of the year. 

Datscha claims the biggest investors are from Asia, who financed projects of over 4 billion pounds in the first half of 2018. In addition, PwC recently started a real estate desk for Asian investors interested in European properties. 

There have been high-profile acquisitions of German firms by Chinese organisations in the last few years. However, the growing investments from Asian firms have been restricted in some countries.

Recently, the administration vetoed an acquisition by a Chinese firm in Germany. It is believed to be one of the steps by the German government supporting the US in imposing restrictions on trade with China. 

Avison Young is another company that bought a London-based real estate firm, Wilkinson Williams, for $190 million. There is a strong demand for office space in the UK, where the operators are looking for strong rental growth. In addition, rental growth in industrial properties due to inflation is expected to continue for years.

The residential market is easing on low foreign demand. Economic issues and trade war, change in government regulations, and geopolitical issues have led to a slowdown and flattening of property prices. However, ISA claims the investment appetite is still growing, and there is no shortage of capital. 

To know more about Brexit's impact on UK-EU real estate, click Hamilton International Estates (www.hamiltoninternationalestates.com).