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UK commercial property values rise at slower pace in January
[BENGALURU] British commercial property values rose at their slowest rate for three months in January, a closely-watched index showed on Wednesday, as Britain inches closer to formally triggering its exit from the European Union.
The value of British commercial assets grew 0.25 per cent in January compared with December, MSCI's IPD real estate index showed, as a recovery from declines seen immediately after Britain's June 23 Brexit referendum appeared to lose steam.
Although prices have held up better than expected since the vote, analysts have warned values could fall this year as uncertainty over the path of Britain's EU exit and its economic future dampen sentiment among buyers and occupiers.
Some financial firms, among the biggest users of office space in London, have warned they could move jobs overseas over concerns about their ability to service EU clients once Britain leaves the bloc.
HSBC and UBS have said they could each move about 1,000 jobs out of London.
Uncertainty has already meant prime properties are selling for discounted prices, and property consultant JLL said landlords were having to offer better incentives to lure in tenants, especially in London.
An industry survey earlier this month showed 18 per cent of respondents had reported evidence of firms looking to relocate away from Britain in response to Brexit, up from 14 per cent seen in the preceding quarterly survey.
In central London, 32 per cent of respondents said they had seen this evidence.
"There are clients researching other potential locations in case they need to make decisions (to move)... Inevitably there may be a proportion that go in that direction," James Beckham, head of central London investment at property consultant Cushman & Wakefield, told Reuters.
MSCI's UK IPD data showed that the value of London West End and Midtown offices fell slightly in January.
The IPD real estate index is one of Britain's most widely watched commercial real estate data surveys, and tracks about 10.5 per cent of professionally managed British property across all sectors, including retail and office property.
The January index was based on data from 3,052 property investments with a total capital value of £44.5 billion (S$78.308 billion), MSCI said.