German fund managers say they remain committed to UK real estate, despite the outcome of yesterday鈥檚 referendum on EU membership.
Hamburg-headquartered , which owns eight property assets in the UK, will be 鈥渞ecalibrating its strategy鈥�, managing director Martin Br眉hl told IPE Real Estate.
鈥淲e are not happy with the outcome, but we will have to carry on because we are in the business of investing core money,鈥� said Br眉hl, who heads up international investment for the 鈧�31bn real estate fund manager.
鈥淲e like the UK. we are absolutely certain the UK won鈥檛 go away as a safe-haven market in the mid-to-long term.鈥�
But uncertainty caused by a complicated 鈥� and possibly protracted 鈥� exit from the EU will require Union to 鈥渓ook at the way we price assets and the way we price risk鈥�, he said.
Immobilien, which has been expanding its business across Europe in recent years, is unlikely to reverse its activity in the UK.
According to executive director Marcus Cieleback, the Augsburg-headquarted company which moved into the UK in 2013 with the , remains committed to investing in the country鈥檚 housing market, for instance.
Last week, Patrizia bought a 28-tower in London with a view to building private-rented accommodation, and Cieleback, who heads up Patrizia鈥檚 research department, said the company 鈥渟till believes鈥� in the UK PRS story.
鈥淚f you think the fundamental imbalance between supply and demand has not changed, then why change,鈥� he said.
Both Cieleback and Br眉hl believe it is business as normal for core UK assets with strong tenants 鈥� 鈥渁 solid West End office building is still a solid West End office building,鈥� Cieleback said 鈥� but the situation looks less favourable riskier, secondary assets and for speculative office development in the City of London.
Br眉hl said Union鈥檚 UK portfolio had an occupancy level of 99.2% and the company was not concerned about its existing holdings.
But he said there would a two-tier market, separating well-leased core assets and and 鈥渕ore risk-prone鈥� assets.
US-headquarted Global Investors, meanwhile, has warned investors about 鈥渢aking a short-termist view and precipitating any negative market reactions鈥�.
Andrew Angeli, head of UK research, said: 鈥漁ver the coming days and weeks, we do not recommend fundamentally altering portfolio strategy. Be patient, monitor the evolution of financial markets and seek counsel from a host of reliable sources.
鈥淲e continue to take the view that the UK will remain business friendly and among the world鈥檚 most attractive environments for foreign investors. Property will still benefit from market transparency, liquidity, rule of law and favourable lease structures.鈥�
