June 27, 2016
Questions have been raised about what will happen in the aftermath of the United Kingdom’s historic vote to leave the European Union. As commercial real estate will likely not be immune to the impact of “Brexit,” Connect Media’s Amy Wolff Sorter directed some questions to Simon Prichard, senior partner with London-based commercial real estate firm Gerald Eve.
Q. Were you surprised by the referendum results?
A. I think many of us in the UK were surprised by the result, and voting patterns across the country. Markets inevitably react to uncertainty, and there is little doubt that we face some difficult days ahead.
Q. Then what is the next step for the UK?
A. The short-term need is for stability. Looking longer term, we have two years to “consciously uncouple ” the country from the EU. This, of course, assumes that, with such a slim majority in favor of exit, Parliament backs the people’s will. The general assumption is that Parliament will not do so, especially as (Prime Minister) David Cameron indicated he is stepping down.
Q. How does Brexit impact UK’s commercial property market?
A. Some will argue that the property market already needed a correction, Brexit or otherwise, to move forward. I personally believe that a significant market indicator will be whether Wells Fargo completes the purchase of its new European headquarters in London’s financial district. If this happens, it would be a significant statement of intent and endorsement for Britain from one of the world’s largest banks. It will also be very relevant for Gerald Eve, as we are advising the developer.