- January 1, 2020: Vol. 14, Number 1

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Brexit deal to trigger new inflow of capital into UK

by Marek Handzel

A potential Brexit deal could trigger a new inflow of foreign capital into the UK, particularly into the London office market, where yields remain higher than in Paris and Berlin.

Should the next UK government secure a smooth exit from the EU, then the weakness of the pound is expected to attract new investors from the likes of South Korea, Japan and the Middle East in particular, says Jessica Berney, the fund manager for the Schroder UK Real Estate Fund (SREF).

Berney also believes that the commercial real estate market will remain strong in 2020, despite some investor and occupier hesitancy around Brexit and a general slowdown in economic activity. Although Schroders expects growth in the UK to hover around the 1 percent mark over the next two years, this will have little negative impact on its office market — particularly in London.

“Demand for high-quality and flexible office space continues apace, and we don’t anticipate this changing during 2020,”

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