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Pre-Brexit, London was the leading market for commercial real estate investment. From the devaluing of the pound to corporate relocations from the UK to other markets throughout Europe, softening in London will continue to ripple through commercial real estate markets around the globe. Here are some of the ramifications of Brexit for places outside the UK.
Trade And Travel
Bisnow Special Report: Industry Titans On What Brexit Means For U.S. Real Estate — Brexit opened the door to anti-EU parties in the Netherlands, France, Hungary and elsewhere, which could further weaken the world’s largest trading bloc. Increased trade barriers (especially if President Donald Trump successfully cancels NAFTA) could be bad news for industrial and retail real estate across the globe.
Experts Note Sluggish Hotel Growth, Downtick In International Travel Following Brexit Vote — International travel declined in the months following the Brexit vote, concerning hospitality companies. That has reversed course in early 2017, with travel generally picking up across the globe, though the U.S. is still feeling pain as Trump’s travel bans may discourage travelers from coming to the states. The good news (depending on who you are talking to): Brexit has weakened the pound, so Americans in London have more spending power.
A Hit On Manufacturing?
Brexit: What It Could Mean For ATL Economy — Georgia’s manufacturing industry (and other strong manufacturing markets in the U.S.) could be negatively impacted by Brexit.
NYC The Big Winner?
Could Brexit Be A Boon For NYC Luxury? — NYC has long been the most popular destination behind London for foreign investment, so the Big Apple is poised to benefit in a myriad of ways from any weakness shown in London. Leading up to the Brexit vote, the UK lost 39% of its investment. Within the same period, New York investment nearly doubled.
A Shift In Global Power
Brexit Drops London From No. 1 To No. 6 In JLL's Ranking Of Most Dynamic Cities In The World — London had been leading the world in tech innovations, growing population and socioeconomic strength for a few years, but following the Brexit vote the city plummeted from No. 1 to No. 6 in JLL’s annual rankings, propelling Bangalore to the top spot.
Frankfurt To Replace London As Europe’s Financial Center Post-Brexit? — London is the banking powerhouse of Europe, but that position is being threatened as multiple banks have already relocated or are considering leaving the city to a more secure area within Europe. Could Frankfurt take the crown? Or perhaps Dublin?
Major UK Firms Thinking Of Moving HQs Out Of Britain After Brexit Vote — It is not just banks; 76% of London-based companies KPMG polled were considering relocating their headquarters, a possible benefit for other global cities.
Brexit’s Impact On U.S. Real Estate Has Been Minimal At Best — Immediately following the Brexit vote, many experts predicted the U.S. would see a surge of investment as capital sought a safe haven. So far, that has not happened, but SIOR president-elect and Markward Group CEO Del Markward believes it is coming, especially as uncertainty returns to the UK during the two-year Brexit process. He projects investors will increase their exposure in the U.S. (and possibly Germany), shying away from Britain in the near future.
"There is no safer play than the U.S. in the world today,” he said.
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