John Forrester, EMEA chief executive of Cushman & Wakefield:
“The property sector has probably followed the EU referendum more closely than any other industry and has witnessed the impact of the uncertainty and speculation in the run up to the vote.
“While the decision of the UK electorate is now confirmed, a period of further uncertainty is unavoidable as businesses, the financial markets and the political establishment in the UK, Europe and globally come to terms with what this means.
“Clearly the impact of this decision will be felt beyond the UK’s shores as the UK is the EU’s third largest market by population. We are therefore entering a period of unprecedented change as markets and sectors adapt. What is clear is that in any scenario there will always be opportunities and those will become clear in the weeks and months ahead.”
Guy Grainger, CEO, EMEA, JLL:
“The vote for Brexit brings an unprecedented new dawn for Britain, and for Europe. In the short term we are now in a period of pronounced uncertainty.
“Even if it is effectively ‘business as usual’ for the UK in terms of trade and legislation until 2018, such a major change will inevitably create uncertainty in the real estate markets. In the event of a well-managed exit these impacts will be largely confined to the next two years.
“In the short term we may see a weakening in occupier demand as businesses to more time to consider investment decisions. The impact on rents may be limited by tight supply, but activity will be adversely hit while initial uncertainty about direction and timing continues. Investor sentiment may also remain subdued in the short to medium term, although a drop in Sterling may provide a moment in time for some opportunistic international investors. For property markets, the initial correction may be most severe but should be followed by an upturn as opportunities re-emerge in UK core markets and benefits of weak sterling are recognised. Sentiment and relative pricing will be key.
“This event is a trigger for many investors and occupiers to make adjustments to their real estate strategy. Some decisions may continue to be put on hold, or reassessed entirely. At the same time, we expect there may also be some positive implications for other mature markets in Europe and, potentially. In the light of currency movements, international investors may be attracted to certain parts of the UK market. This could be relatively short-lived at least until currency volatility subsides and notwithstanding the underlying uncertainty which will colour sentiment for at least a couple of years.
“We have been keeping close to our investor and occupier clients on the issue of the EU Referendum and their likely approach in the event of a Brexit vote. One thing is absolutely certain: clients across the board are going to need access to up-to-date, comprehensive data to inform their real estate strategies. JLL’s global research team taps thousands of data points every day. With hundreds of years of combined experience in the team, the real skill is in the ability to interpret how everything from global capital flows to REIT performance, interest rates to labour market data, and investor and occupier sentiment to demographics and migration will play out in real estate."
Donald Rowlands, Herbert Smith Freehills LLP:
"The jury’s out on whether an exit will fundamentally alter the UK’s status as a global investment centre for real estate. The UK is seen by some as a gateway into the EU, and by others as an integral part of a global real estate market whether or not the UK remains part of the EU.
”We have spoken to a number of our overseas investor and domestic real estate clients over the last few months. Brexit worries have undoubtedly impacted upon investor confidence in the UK investment market - volumes are well down and buyers and sellers are eagerly awaiting tomorrow's result before re-entering the market.
”It is the uncertainty surrounding the result which has, in my view, caused the nervousness in investor sentiment. UK real estate remains an attractive investment in a volatile world where investor returns from other fixed income investments remains challenging.
”The exit vote may be seen by some overseas investors as an opportunity to enter the market at a time of uncertainty and, assuming there is a continued negative impact on sterling, to benefit.”
Richard Lim, chief executive, Retail Economics:
"In the wake of Brexit the world has become a much more uncertain place with the immediate future likely to be plagued by volatility and fear. As households digest the implications, initial concerns will be centred on the strength of the economy, job security and political instability which will choke consumer confidence.
"In early trading the pound has fallen to a 30-year low which in part is likely to reflect an interest rate cut being priced in to markets. A weaker pound will put intense pressure on import costs with shoppers likely to see the initial impact in the way of higher food prices given shorter supply chains.
"Economic data on spending, jobs and confidence will be under close scrutiny as repercussions unfold in the coming weeks."
Saker Nusseibeh, chief executive, Hermes Investment Management:
“With the vote decided yesterday, we now have to move away from the rhetoric that typified this campaign. Prior to the referendum, we ran several scenarios on our strategies, and we are reasonably confident that they were well positioned for a Brexit vote in the short term.
“However, we are watching market moves very carefully to assess the degree of contagion, if any, to global markets. Besides a sharp sell-off in risk and in sterling, as well as a recession in the UK (which is expected) our fear is that this may trigger political uncertainty within Europe which in turn may lead to a severe global market correction.
“In any case, we know that we are now in an even more prolonged super low interest rate environment outside of the UK, with the US likely to delay its decision to raise interest rates even further out.
“Throughout, our main purpose remains to help our beneficiaries retire better. Our commitment to our beneficiaries from Europe remains completely undiminished and it goes without saying that our business model had always assumed that we would continue to abide by all EU financial regulations.
“One final thought perhaps; it is now incumbent on everyone in the financial sector to work to try to mitigate the risk to our beneficiaries created by politics.”
Mark Bladon, Investec Structured Property Finance:
“With the pound likely to continue to lose value over the next six months, coupled with a likely fall in real estate values, we anticipate renewed interest from sovereign wealth funds and private equity houses which will see new value and opportunities in our property market. From a domestic lender’s perspective, we expect high-street lenders to reassess their lending terms considering how funding costs adjust in the medium to long term. This will also create opportunities for specialist banks that are able to react quickly to the new status quo. We have been working on a number of deals, across several use classes, ranging from student accommodation to residential development, which we expect to take forward now that a decision has been made.
“The UK is the world’s fifth largest economy, with London recently named the world’s top financial capital; this pre-eminence is a result of centuries of growth and prosperity. London and the UK’s advantages over other large financial centres are numerous but the main ones include the favourable time zone, strong rule of law, common language of business, as well as a much-envied regulatory environment; none of this is going to change as a result of today’s vote.”
