All eyes on London
IN keeping with the mantra that one should buy the dip, investors across the globe are seizing the Brexit opportunity to acquire London properties at lower prices, Robert Collins, CEO of Savills Thailand said last week.
Within the region there is a serious surge in demand and buying activity from Thais and people in Hong Kong and Singapore where property exhibitions immediately after Brexit were absolutely packed.
“What’s happened since the vote took place is dealing prices for very prime residential are only off by 5 to 8%.
“Prices have not crashed at all and if you look at it, a 5 to 8% reduction only takes it back to very recent history – we are not talking about much of a correction at all.
“But more importantly, what the short, sharp reaction to Brexit was the movement in currency where the pound against the Thai baht for instance had moved by 10%.
“So the Thai buyer is able to realize not only a 10% currency gain but also perhaps as much as 8% on the deal so we are talking about almost 20% cheaper in August than it was say in May this year.”
What is worth remembering, said Mr Collins, is that London faces a housing shortage and needs thousands of more homes coming online to support population growth than what is already in the pipeline.
“So all in all, the prognosis is that it has become a bit of a buyer’s market, you buy the dip, this is the dip, this is the buying opportunity.
“Markets do go in cycles, but this does not look like it represents any significant downward trend.”
Counterbalancing the fear that major corporations with large business in London that rent significant amount of space will immediately relocate to other parts of Europe after Brexit is the question whether these other parts of Europe have vacant office space to accommodate a sudden shift of these huge corporations.
“The answer is they don’t, on the most part they do not have huge chunks of office space available on terms that are easily securable for that type of corporations.
‘’And secondly do those markets where those corporates actually want to or are able to move to, do they have the schools for the children, do they have residential accommodation for rent?
“They are like glaciers; they move slowly.
“The evidence so far post-Brexit is that that isn’t happening and it probably not even going to happen even if they want it to happen – so again it hasn’t had an impact.”
Mr Collins added that while UK may have fewer opportunities in terms of Euro zone agreements it has a world of opportunities in the Commonwealth and other countries.
“Thailand for instance immediately started negotiations for a trade agreement, almost straight away. The UK is open for business and the outlook from what we have seen so far is generally quite good.”
CAPTIONS:
TOP: People strolling through a chic London neighborhood. Photo: Pedro Szekely
INSET: Mr Collins says this is not a significant downward trend.
By Nina Suebsukcharoen
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