Bulls and bears alike are scrambling to secure their positions in a more and more uncertain London.
What everyone can all agree on — and what the Wall Street Journal put into words — London real estate has undergone correction. In Central London, property values have fell by between 5 and 10 percent, while public landlords’ trading levels intuit a decrease of 20 to 30 percent, according to Green Street Advisors.
But is the correction over? It depends who you talk to.
Houston developer Hines is feeling bullish; the company is planning to start buying properties again this year and, according to Lars Huber, Hines’ chief executive in Europe, they’re underwriting deals too.
CBRE Global Investors, on the other, hand plan to be “net sellers,” as the firm’s UK head of research Andrew Angeli put it.
Complicating matters are, of course, the politics of the situation.
Three years ago, when the market started to soften, investors swarmed it in search for deals, but then Brexit happened and suddenly the surety that London would always be a bustling hub was thrown into question. Then, just as investors were just getting relatively comfortable with the unknowns of the upcoming divorce (largely thanks to continued investment from hefty foreign buyers), the threat of a change in government, from Theresa May’s Conservatives to Jeremy Corbyn’s Labour Party, began to loom large.
All that’s certain, according to Huber, is that the “market that has softened and no one really knows exactly when is the turning point.” Or, in other words, we think we know what we don’t know.
[WSJ] — Erin Hudson