Life in Hong Kong is lived on fast forward. Every day is a hectic race to make more dollars but MIPIM Asia ensures Hong Kong’s real estate players have time to stop and talk trends.
We come 9,000 miles to network with them and to hear their views. But however far you travel conversations about Brexit track you down. The good news is that all the Asian investors we talked to are bullish about investing in the UK and optimistic about its post-Brexit future.
“London will ride Brexit”, said the CEO of one major family office. They have been (and remain) prolific central London office buyers. “We are still very keen on London. Our only problem with it at moment is overcrowding by bidders and a shortage of the right stock,” added another.
For 160 years, Hong Kong was London’s sister city on the South China Sea. Hong Kong investors have always seen London as Europe’s gateway. It’s not a tradition they are showing any signs of giving up.
We had feared they would be cold on the UK, but exactly the opposite was true. The Brexit noise and falling pound has had a Siren effect on them.
The UK legal and tax regime are an attractive product. Any poorly judged real estate tax rises could choke inward investment.
— MIPIMWorld (@MIPIMWorld) November 29, 2016
The stamp duty rises on high value property and the PRS sector seem only to have slowed the market and reduced receipts. To mix metaphors, if you’ve got a golden goose - don’t over milk it.
It was standing room only at the political risk and real estate session. We sat on the panel with Neil Robinson of ABP, who are redeveloping Albert Dock in a multi-billion regeneration scheme and was upbeat about Brexit. China’s global trading perspective and gigantic scale makes Brexit look a lot smaller that it does to us living in our Brexit obsessed bubble.
Investors waiting for a 2008 style price plunge after Brexit could be disappointed. However, Hong Kongese investors are still benefiting from a virtuous equation: weak sterling + low interest rates + (some) price correction = big profit on entry.
We are very busy selling properties all across the market to inward investors from the Middle East and Asia (and acting for them in the buying). Paul Spaven of TFT seconded our experience. His purchase due diligence teams are 12% busier since the Leave vote.
Christine Lam’s Investor Forum traditionally brings together all Asian property world’s big bosses. The session was supposed to be about opportunities in Asia, but most of the time was spent discussing the UK’s risks and opportunities post-Brexit.
These long term plays sit alongside a consensus that leaving the EU will bring short-term volatility. They expect this to happen when the UK passes difficult milestones along Brexit road - political controversy will create volatility and volatility always creates pricing opportunity.
Hong Kong investors are backing Brexit Britain’s assets. The wealth and activity they bring can only be good for the UK and its real estate industry.