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News Release

London

JLL outlines 'Grexit' implications for real estate investment

Commenting on the implications of a 'Grexit' from the Euro, Andrew Burrell, Head of Forecasting at JLL commented: "Our view is that...


​Commenting on the implications of a 'Grexit' from the Euro, Andrew Burrell, Head of Forecasting at JLL commented: "Our view is that real estate will hold up well, even if the short term dislocation is dramatic. If a last minute deal cannot be secured, the prospect will be increased volatility, capital controls and rising bond yields, adversely impacting on financial markets.

"The Greek economy will be hit hardest, though the Eurozone will not be immune to contagion particularly the fringe. It is likely that continued ECB activism will be used to help moderate the severity of the impacts. As a result, post-Grexit, core European real estate markets will continue to benefit from plentiful liquidity and low financing costs. Debt may become more expensive in peripheral Europe in the short term, but not in Germany, France and the UK. Given the turbulence elsewhere, investors will continue to be drawn to real estate for its defensive qualities.

"Europe is the UK's largest trading partner and there is a high chance that an adverse shock to European growth will feed through. If so, this could poorly influence the view on the EU within the UK and heighten calls for Britain's exit from the union. This would further weigh on the UK's attractiveness as a destination for inward capital, not only in real estate.  But if the UK economy remains resilient, Grexit may even increase the attractiveness of the UK as a safe haven."