OK, I have some good news and bad news. 

Liz Hamson Leader

I know you want the bad first so you can end this on a high, but given that this is precisely the moment the nation inhales sharply and starts to hold its breath over Brexit – and that we are still none the wiser as to what will happen, let alone what the impact might be – that would be misleading. So I’m going to start with the good news – and there is quite a bit of it.

As we reveal, Chinese investor Cindat Capital Management is in talks to buy Canary Wharf office building 30 South Colonnade from HNA Group. Also in Canary Wharf, Citigroup is poised to buy its UK HQ for £1bn-plus in a deal already being hailed as a vote of confidence in the UK ahead of Brexit, much as Wells Fargo’s acquisition of its offices after the EU referendum was in 2016.

The more bullish in the market will proclaim that Brexit fears have been massively overstated and reel off deals such as the Hilton hotel portfolio sale, British Steel’s sale of 15 Fetter Lane to Esas Holding and Tritax Big Box’s acquisition of db symmetry. They will argue that while property players haven’t hit the accelerator, they haven’t hit the Brexit brakes either.

Unfortunately, there is another read of the Citigroup deal: that it has less to do with confidence in the UK and more with new accounting rules that lump leases on balance sheets as liabilities and make it preferable to own property. Moreover, elsewhere in the market, the stark reality is that not only have the brakes been hit, they have been slammed so hard that the ABS – or what you might call Anti-Brexit System – has kicked in and things have shuddered violently to a halt.

Commercial property investment slumped to £2.6bn in January, the lowest level since after the referendum, according to Capital Economics, which warns that activity is not likely to rebound this year.

The situation looks decidedly grim in some sectors. The retail investment market is at a standstill. Clearly, other factors are also at play, but Brexit has not helped. One shopping centre agent admits: “Nothing is transacting. Everything is on hold until post March.”

Even the usually insouciant industrial market has quietened down, although given how previously buoyant it was, it is expecting a Brexit bounce after 29 March. Others, like Capital Economics, are less optimistic. There is also the question of what happens if Brexit is kicked down the road. Will investors continue to wait and see? Will they view it as an opportunity to go on a bargain hunt? Will they lose patience and get the hell out of Dodge?

The almost ugly

On the plus side – I couldn’t end on a low – at least landlords can breathe a sigh of relief that the High Court has agreed with Canary Wharf Group that Brexit does not constitute a ‘frustration’ of the European Medicines Agency’s 25-year lease at 30 Churchill Place. As Sir George Iacobescu notes, if the EMA had been successful, it could have “undermined fundamental principles of English law and set an unfortunate precedent”. Very unfortunate indeed given how Brexit is playing out – or, more accurately, not.