I’d like to see BTR reach the stage where assets are trading so we get some benchmarking, allowing developers and lenders to get more comfortable with the sector.
It is still dominated by the big institutions. We don’t have enough entrepreneurial third-party developers building speculatively.
I expect to see continued uncertainty over Brexit. However, there will be opportunities. If there is a soft Brexit, the real estate sector will realise that the outlook isn’t as bad as feared and this should result in a bounce in activity and prices. In the event of a hard Brexit, we could see a replay of what happened after the global financial crisis, with the well-capitalised propcos surviving and even flourishing. International buyers are unlikely to be as affected and will continue to see value in the world’s fifth-largest economy.
Resolution: To stay patient and not get caught up in the madness. Some debt platforms and specialist lenders are aggressively chasing deals and moving up the risk curve and the risk is that you start losing market share and change strategy. We’ve seen it all before and there will be opportunities for us to lend, whichever scenario plays out.
Mark Bladon, co-head of origination at Investec Structured Property Finance
2019 forecasts: what lies ahead
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2019 forecast: Mark Bladon (Investec)