Who will benefit and who will be hurt by Brexit? That’s one of the primary concerns in Cannes this week at the international property exhibition MIPIM. There are multiple views on the matter, ranging from the view that markets have already priced in the UK’s exit from the European Union to fears that it will be part of a widening spiral of dissolution for the EU.
London itself still appears to be coming to grips with the fallout of the decision from last June, but people in the real estate community do not appear to be consoled by improved economic results that have made the news in recent weeks. Of greatest concern to the city’s politicians and market experts seems to be ensuring that London remains an open city that’s accessible to new people and investors. This is the stated goal of the city’s mayor, according to Deputy Mayor Jules Pipe, who said that if Brexit makes relations with the EU more difficult, London must become more open to the rest of the world.
Tomas Jurdak, MD in the UK of HB Reavis, said that his company’s primary concern was that the situation in London remain as surprise-free as possible. “For us the main thing is predictability of the business environment. Alternative politicians bring some kind of uncertainty to the market,” he said. “It’s very hard to plan your business and to allocate your resources to different locations and this is the key factor for us with the new way the politics are being run in Europe.” Jurdak said that the biggest impact of the Brexit vote for HB Reavis was that the Slovak-based developer was reconsidering its original intention to invest not just in London, but in other cities in the UK. “With London, we are sure that it will keep its dominance in international business, but with regional cities I am afraid they might be more affected.”
Miles Gibson, head of UK Research at CBRE, says that the actual beginning of Brexit negotiations will not be a shock to the system. “We don’t think that the actual service of Article 50 will itself be a market moving event,” says Gibson. “We think that is heavily discounted by the market and priced in, effectively. We think the next bumps along the road might emanate from elsewhere in Europe. We are watching the Dutch election tomorrow, the French election in particular because if Marie Le Pen is president of France, that makes Brexit look like a storm in a teacup for the European Union.”
