Recent political and societal events in the UK have put a dampener on our summer and, if we look back at the past six months, London and the rest of the UK have certainly been through the mill.
Despite this, the UK’s household balance sheets and the economy in general have remained more resilient than most expected and industries have had to take the rough with the smooth to stay active and fruitful.
Property is one industry that has remained, and must continue to remain, nimble, navigating tricky waters and constantly evaluating risk and pricing to mitigate nervousness. When all is said and done, we all need to get up, go to work, shop and socialise, so the world must go on and, with the correct advice and experienced counsel, there are still good deals to be done.
Prime retail assets are still in high demand among investors, especially those from overseas who still see London as a true global capital and who want to make the most of the transparent market in the UK.
We need only look at recent deals in London to verify this theory. Invesco’s purchase of Delancey’s stake in Southside Shopping Centre for £150m has, as the biggest single shopping centre transaction of 2017 so far, highlighted demand for mature assets with a strong catchment and curated mix of tenants.
The weaker pound, despite being bad news for our summer holidays, has proved very advantageous to attracting foreign investors, as well as helping the export market, which, in turn, nudges GDP along.
As well as the trophy sites, secondary shopping centres such as King’s Walk, Gloucester, and Waverley Mall, Edinburgh, have been snapped up, showing that, with the right asset management plan in place and appropriate pricing, it is possible to show a potential buyer how the scheme will work and perform in future.
Creativity with capital and occupiers with proactive strategies are vital to remain attractive to the rest of the market and retail sectors including jewellery, athleisure, cosmetics and tourism-linked spend all support this theory, with positive trading figures in recent months.
It is often these times of uncertainty that can deliver those golden opportunities that would not otherwise come around
Agents who act like consultants and not just brokers can show their worth in this kind of market. Having worked through numerous economic downturns and periods of political adversity, I know that this rounded experience pays dividends.
In fact, it is often these times of uncertainty that can deliver those golden opportunities that would not otherwise come around, particularly if you look off market.
For many, Brexit is something that has caused uncertainty for a year now. Although some still shudder at the word, there has been little to suggest it has had much of an impact yet on the UK property market. With whisperings of a ‘softer’ Brexit now much more audible, we will wait to see whether this will result in a more business-friendly deal with the EU.
So we must remember: there are many things to celebrate. In real estate we are seeing steady income returns, a continuing low-base-rate environment, transparency and a significant yield gap from gilts. Coupled with increased foreign investment due to the lower price of sterling, we can be safe in the knowledge that the UK is still open for business.