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News Release

London

Making sense of Brexit: Latest update


​“As the Chinese say, we live in exciting times. Political and economic affairs are currently moving at such speed the implications for each of us appear to twist and turn daily,” says Jon Neal, JLL UK’s Head of Research.

JLL's latest Research briefing note - Making sense of Brexit can be downloaded here.
 
Key takeaways from the update are:

· Political and economic uncertainty is clearing slowly, although financial markets remain volatile and GDP growth expectations have been downgraded
· Occupiers are taking stock; flexibility is likely to become fundamental to near term decision making. Longer-term impacts (loss of ‘passporting’) or benefits of Brexit are still to play out
· London office occupier demand cooled in Q2 and is likely to remain subdued in H2. Low vacancy, coupled with an increasingly diverse occupier base, should prevent a dramatic fall in rents
· High end residential in London is susceptible to weaker demand, although the fall in sterling will attract overseas demand from purchasers from dollar pegged markets – notably Middle East and Asia
· Hotels are set to benefit from weaker sterling and increased tourism. Prime hotel assets are least vulnerable to any price correction
· Occupier demand in industrial has held up though a softening is in prospect; slowing speculative supply should support rents. Investment pricing will come under inevitable pressure in the short-term
· Retail has responded well since 2008 to cyclical and structural change; retail spend is relatively robust, although not immune. Relevant and resilient retail will hold up, weaker secondary is more exposed
· Direct real estate investment has paused to absorb the implications of the vote. Assuming occupational demand holds and favourable currency movements support overseas demand, impact on values will be contained. Indirect investment remains under pressure