Nery Alaev writes about Brexit affecting real estate.
It seems that the UK is going through a period of ‘calm before the storm’ as the economy continues to perform well and grow despite the supposed post-Brexit crash that was meant to occur after the country’s citizens voted to leave the EU in June.
This isn’t to say the crash isn’t coming at all, but it simply hasn’t arrived yet. One good example of this, is London’s skyscrapers, as World Property Journal reports.
Knight Frank’s latest ‘Skyscraper Index’ revealed that office rents for skyscrapers in the capital remained at record high levels, despite the vote nearly three months ago.
The capital’s rents are the highest in the world – that honour goes to Hong Kong with an average cost accrued of $278.50 per square foot, per annum. Still, London is 4th on a list of 23 cities listed in Knight Frank’s index with a cost of $114 per square foot, per annum.
Commenting on the index, Will Beardmore-Gray of Knight Frank said:
„We have seen strong rental growth in London’s skyscrapers over the past two years, and rents remain resilient in spite of the economic uncertainty arising from the European Referendum result.
Demand for space in London’s skyscrapers is undiminished with a number of deals done already in the second half of the year at very good levels.“
When will the wave hit?
This news brings about the question – just when will the impact be felt in the UK?
Recent news has been cautiously positive regarding Brexit, but it doesn’t change the fact that the overarching message is one that suggests the country will suffer as a result of the vote.
A recent BBC article, for instance, paints a picture of temporary gains but overall, the picture isn’t as rosy.
In summary, the good news is still rolling in – I’m simply not convinced that the UK is out of the woods yet, however.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.