Brexit continues to be the focus of headlines and most conversations, and rightly so.  The vote is imminent, and the outcomes continue to become less certain both in terms of nature and extreme.  However, it is important to highlight the underlying pace of economic growth remains resilient and the UK property market is performing well.  Salamanca Group retains a positive stance towards the health of the property market almost regardless of the outcome of Brexit for the reasons twofold:

• London remains one of the top financial cities in the world
• The UK remains a robust and stable market known for its favoured time zone, legal system, trusted financial regulator and ease of doing business

Clear evidence of the market’s positive health is shown through investment pricing, volumes to date and market performance.

• Over the first ten months of 2018 the City of London investment market volume of transactions reached its highest level ever for that period (£9.47bn, 7.6% up on the same period in 2017)
• Across all commercial property sectors London retains its crown as the world’s most popular destination for cross-border investment into real-estate, with inward volumes more that 50% higher than Manhattan, US
• The occupational market remains strong with 8.9m sq ft leased in the first nine months of 2018. This is only 4% down on the same period in 2017, which was the strongest ever year in the central London occupational market*
• The only surprise lies in the lack of upward rental growth which would be expected given the low vacancy rates and restrained development pipeline

Despite these healthy statistics, Brexit is powerful enough to cause pause for thought and in the worst case a change in activity and sentiment. So, whilst there is no cause for complacency, we see a strong UK and London in particular, and its place in the world order will remain powerful.

As the future unfolds, Salamanca Group is excited by the measured openings that should emerge in the UK.  Salamanca Group is involved across a mix of real estate assets – light industrial, offices, retail, hotels and residential.  Whilst specific characteristics effect each sector, we are confident that capital will be quick to take up opportunity particularly in a low sterling exchange environment.

Salamanca Group holds a prime real estate advisory capability merged with in-depth property expertise across use class and location. Unusually for the property market this is combined with significant corporate advisory experience. This corporate and property combination yields the potential to identify added value and develop corporate strategic to drive and to capitalise on any opportunistic returns that emerge.

Salamanca Group sits at the epicentre of real estate markets offering both expert corporate understanding and real estate transaction experience.

*All statistics sourced from Savills 2018

This article is part of our December 2018 Group Newsletter

To read the PDF version online, click here, or to read another article online, please follow one of these links:
Changes to lease accounting by Dena Bellamy, Managing Director, Corporate Advisory
A first-hand account of the recent Cuban Presidential visit to the UK by Lord David Triesman, Group Director
Building for the future by Dominique Allnutt, Director of Brand, Marketing & Communications