Last week a draft agreement on Britain’s withdrawal from the European Union was agreed between the UK and the EU. The deal, however, still has to be passed through parliament and it is looking likely UK ministers will vote against the bill, rather than in favour.
The ongoing insecurity around Brexit has had its toll on the property market. On Friday, we saw mixed results when it came to listed property companies.
For Landsec and British Land, Friday ended with them seeing gains in their share prices. Landsec saw a 0.33% increase to 842.40p, while British Land saw their share prices rise 1.29% to 594.6p. However, Great Portland Estates and Segro saw their share prices fall. Segro dropped 0.16% to 614.00p, while Great Portland Estates dropped 0.53% to 711.4p.
On the same day, the FTSE 100 and FTSE 250 both dropped, 0.34% and 0.39% respectively. This left the FTSE 100 at 7,013.88 points and the FTSE 250 at 18,589.09. Also, the pound was down 0.24% against the Euro and up 0.56% against the dollar.
Despite insecurity and confusion around Brexit, investment in property doesn’t necessarily seem to be slowing down. Reports show that investment in West End property, for instance, will hit £7.4 billion by the end of the year – which is up from 2017. Equally, foreign investment has remained strong throughout 2018, with deals like Korea’s National Pension Service acquiring Plumtree Court for £1.16 billion.
However, large property companies are still holding out to see the results of Brexit negotiations. Landsec are looking to begin £3 billion of developments, including £2 billion of office developments in London – but only if the UK reaches a good deal with the EU.
Great Portland Estates said it remains “exceptionally well positioned” despite market uncertainty throughout the negotiations. The property developers and investors have a portfolio made up of mostly office space, which reports are showing remains in high demand regardless of Brexit, particularly in London.