This Tuesday, all I wanted to do was stick my fingers in my ears, close my eyes and sing tra-la-la as the Brexit vote pantomime played out complete with gasps from the audience as the extent of the defeat for Theresa May’s deal became apparent. Unfortunately, there is no hiding from the grim reality we now find ourselves in.
I can’t see where the wiggle room is. May has just days to present a fresh deal to the EU, but while most MPs know what they don’t want – a no-deal or May’s deal – no one knows what they do want. Even if they did, a significantly revised deal is not likely to prove acceptable to the EU, while any tweaks the EU might be amenable to are not going to wash with MPs. There is not even a consensus over whether we should ask for an extension of Article 50, with some saying there is no need to and others that we have no choice but to.
We appear to be up the shittiest of shit creeks without a canoe, let alone a paddle, and while some cling to the hope that a beautiful oasis lies beyond, the realisation is dawning among many that Brexit may never have been anything other than a mirage.
What is not an illusion is the damage it is starting to do to the UK commercial property industry. After posing a largely hypothetical threat in the year and a half following the EU referendum, Brexit is now a very real one as we run out of road to agree a deal. It is understood to have been one of the macroeconomic factors behind Evans Randall’s decision to pull out of a £200m deal to buy a large chunk of Clerkenwell.
It has also been blamed for weakening investor sentiment. In a research note, Capital Economics notes that after improving through the middle of 2018, “the value of commercial property investment softened towards the end of the year”. It warns that investors are likely to remain cautious in the first half as a “fudge and delay” scenario plays out and that even if the Brexit fog clears, investment levels are not likely to bounce back. The fundamentals are not there, it says bluntly.
Some of the industry heavyweights who delivered their forecasts for 2019 in last week’s issue would beg to differ, but no one would dispute that challenging times lie ahead for UK property companies.
It could open the door to others. I am not talking about overseas money, although bargain-basement Brexit Britain clearly holds a certain allure. I am talking about a group of players much closer to home: local authorities.
In the wake of the news last week that Spelthorne Borough Council is set to buy two prime London office buildings, we ask if councils are spending too much on commercial property, whether they are straying too far from their home turf and what could happen if Brexit does prompt a significant market slowdown.
Suffice to say, opinion is divided over whether councils are a force for good or acting way beyond not just their comfort but their safety zones.
A huge thanks for all the positive feedback on our print magazine refresh. Keep it coming please – good or bad. The new look is still a work in progress and we really value your input.
Loving the new refreshed design @PropertyWeek @lizhamson @MontagueJones and team! Great to have the Leader up front and the whole magazine feels much clearer and cleaner in layout - congratulations. Wishing you all a successful 2019! #magazine #property #redesign https://t.co/MXESRD3QRI— Olivia Lane-Nott (@SpacecraftLtd) January 11, 2019
Local authority spending: more money than sense?
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Life after the death of May’s deal