As 2016 draws to an end, the world reflects on the ‘roller coaster’ year that left us with Brexit and a politically divided country. The economic forecast for the upcoming year continues to cause uncertainty for investors. However, there may be a silver lining in all this: the potential opportunities for US lenders and investors in post-Brexit Europe.
Daniel Fireman, Head of Real Estate Finance at Howard Kennedy LLP, London, and a leading expert in commercial real estate investment, proposed that a combination of factors suggest that opportunities may be exploited to good effect by US lenders with a commercial and pragmatic approach to lending.
One such factor is the weaker currency. Historically, the Sterling has been one of the most stable currencies in the world. It is now the worst performing currency in its group. This affects many parts of the economy and creates tremendous opportunity for foreign investors trying to gain traction in the UK market.
Another factor is the combination of low interest rates and a potential for high return. Brexit has made the real estate market in the UK more affordable, and much more appealing to outside investment.
However, corporate real estate has been trickier to value post-Brexit. Real estate experts have guess-timated the dip from a range of 5% to 17% and some say nothing has changed, but several factors are certain:
- The UK has experienced a significant drop in commercial real estate purchases
- There is economic uncertainty
- The best gauge of valuation is through property owners
- Existing investors have experienced a hit and continue to face uncertainty
- Potential investors are at an advantage especially because of the low interest rates
Aliant, LLP cooperates with colleagues at Howard Kennedy and other UK law firms and works with clients with existing and potential financial interests in the UK and other countries. We continue to monitor the situation and counsel our clients accordingly. For more information on how we may assist you, please visit www.aliantlaw.com