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Fairyland

No Demand For London Property: Oversupply Beats Brexit As London Office Risk, Ubs Says

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The wave of office buildings under construction in London is a bigger threat to rents and values than the risk of companies moving out after the U.K.s vote to leave the European Union, according to UBS Group AG.

We saw a build-up of oversupply of office space long before Brexit which cant be stopped, Thomas Wels, global head of real estate at the Zurich-based banks asset-management unit, said in an interview. The additional space will hit the market in 2017 and 2018 and isnt priced into rents.

Developers tried to capitalize on rising rents by starting work on a record number of central-London office projects in the six months through March. Values may decline as much as 20 percent there as companies consider moving some operations to continental Europe or delay expansion plans following the vote, according to Green Street Advisors.

International businesses could shift as many as 100,000 jobs away from London within two years of the U.K. officially starting a process to leave the EU because they risk losing their passporting rights, Jefferies Group LLC analyst Mike Prew said in June. Wels, who oversees $77 billion of real estate assets in 29 countries, estimates the number of jobs that move will be closer to 25,000.

To read more about the possible impact from losing passporting rights click here

U.K. commercial-property values probably had their steepest decline since December 2008 in July following the vote for Brexit, Osmaan Malik, a London-based analyst at UBS, wrote in an Aug. 4 report. Office prices fell 6.1 percent in the City of London financial district in July on heightened economic uncertainty, especially for financial-services firms, broker CBRE Group Inc. said on Monday.

Construction began on 51 office buildings in central London in the six months through March and the amount of space being developed almost doubled in 18 months, Deloitte LLP said in a May report.

UBS will invest about $3 billion in property in European nations other than the U.K. over the next two to three years as the economy continues to recover, Wels said.

Edited by Fairyland

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Thus forum has always pointed out that London property was in trouble even before brexit. Media has just started reporting it.

Other note, is a boom being made in Europe?

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Thus forum has always pointed out that London property was in trouble even before brexit. Media has just started reporting it.

Other note, is a boom being made in Europe?

There was a thread started yesterday about rises in Berlin prices

The parasite has killed it's host - so it just moves onto the next healthy body

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There was a thread started yesterday about rises in Berlin prices

The parasite has killed it's host - so it just moves onto the next healthy body

The parasite seems to be very skilled and sophisticated in getting itself a red carpet invitation.

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