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As the investors, traders and owners watch cautiously, delays in the final outcome of Brexit mania is finally starting to have its effect on Uk commercial property market, specially those in London who serve and house international companies and brands.
The listed London landlord at Great Portland Estates has warned that Britain’s vote to leave and delays in implementation will certainly harm the city’s commercial property market as businesses freeze further plans.
In a latst trading update leased this morning by__ Toby Courtauld__ of Great Portland Estates said that confidence is to fall and some business investment decisions to be kept on hold until Brexit negotiations are finalised and new trading arrangements are established with the EU and the rest of the world
Lower bond yields and a weakening cable would be offset by lower prospects for growth because of declining number of interested clientele for rental use.
“In the near-term, we expect confidence to reduce and some business investment decisions to be deferred whilst negotiations to establish our trading arrangements with the EU are undertaken.
Backing up the view is BAnk of England which issued warnings over commercial property being a key risk to the Uk's economy. In a Report it said that risk of “future marked adjustment in commercial real estate prices”.
Great Portland’s share price took a dive to as low as 24 per cent pre Brexit vote to leave the EU, Investors put investments on hold or even turned negative on companies holding portfolios containing London offices and to development projects the City and West End.
Great Portland Estates is behind huge developments such as Facebook’s new headquarters at Rathbone Square and a 19-storey office tower in prime location in Southwark, on walking distance from Waterloo Station
Mr Courtauld also added demand for office space in the West End was currently normal, the uncertainty “will have a negative impact on economic growth in London”.
Global banks, corporations and many other businesses are expected to move some staff out of London and into similar EU hubs like Berlin and Paris in order to maintain their presence in the EU.
GPE owns more than £3.7bn of buildings across London. Mr. Toby Courtauld, MA, MRICS, has been the Chief Executive Officer of Great Portland Estates plc since April 2002 and its Executive Director since April 2002. Mr. Courtauld served at MEPC from 1991 to 2002. He served as the President of British Property Federation. source Bloombergnews