London office prices and retail property will be hit by the vote by Britain to leave the EU
Posted on July 4, 2016.Analysts say that London office prices and retail property will be hit by the vote by Britain to leave the EU. The value of office space in London is predicted to drop approximately 10% following Brexit and the decision to leave the European Union. The Green Street real estate team forecasted that the initial impacts will slump even further in value, with the city likely to suffer more than the West End. This could also lead to the rise in empty properties throughout London and the UK. The Managing Director at Green Street Advisors, Hemant Kotak said, "The City is expected to be hit harder and is likely to see a bigger call-off in demand because it has a large banking and financial tenant base." "The development pipeline is also skewed in the City." Shares in retail property have fallen less than office specialists since Brexit, however Green Street is forecasting a drop in retail values of the same magnitude as London offices. The pressures of Brexit is expected to heap pressure on the retail market which is already struggling with sales and ecommerce. The drop of the pound will also increase the costs to retailers. Alongside the asset depreciation, retailers and office owners will also be hit with empty business rate charges when not occupying the buildings. The uncertainty surrounding the outcome and speed of negotiations for the UK's exit from the EU make it difficult to make long-term forecasts with any certainty. With much uncertainty, commercial landlords will be looking for ways to generate more income from their premises, and look to save costs where possible. This is where Global Guardians can come into place, providing a free of charge security solution, by placing live-in guardians within the building to secure the building, remove empty business rate charges (by changing the ancillary use of the building to residential with the VOA) and generate additional income on the building, where possible. Michael Valentine, Space Coordinator from Global Guardians said, "With the lack of demand within the retail sector due to the uncertainty of Brexit, the amount of empty spaces within London and the UK is expected to rise. This is where Global Guardians can help, offering a hybrid solution to securing the empty premises, removing business rates and generate income in other ways." If you have any questions regarding your empty office space, please don't hesitate to call us on 0208 370 0288.