As investors fearful of Brexit reduce their exposure to the British economy, others with an appetite for volatility are snapping up London real estate. “The volatility causes opportunity,” FirethornTrust founding partner Peter Mather told Bloomberg.
British real estate took a big hit soon after the 2016 vote to leave the European Union, as did the pound, but both have since regained some ground as investors determined which sectors were most exposed to Brexit risk and adjusted accordingly. The automotive sector, for example, has had to rein in its expectations and plans, and the financial sector is already bleeding jobs across the Channel and Irish Sea. Brits interested in working as customs agents, however, have a very bright future.
FirethornTrust is a $263 million trust launched in September by the American Stephens and Van Tuyl families with the aim of capitalizing on London real estate opportunities. Yet they are actually a minority: Asian investors represent half of U.K. real estate investment, according to Bloomberg. The overall volume of the market should be healthy at around $79 billion, in part because of growing clarity over the impact of Brexit, CBRE said in an outlook for 2018.
Another contributing factor is the U.K.’s overall financial situation and exchange rate. Savills Plc director of cross-border investment Rasheed Hassan told Bloomberg: “The currency is cheap and there’s always a big pull to London.”