The consequence of the UK voting to leave the EU is “not a global shock” or a “Lehman-type moment for commercial property in the UK”, an investment chief has said.
Stephen Jones (pictured), chief investment officer at Kames Capital, said there is a large amount of capital for property assets circling within and from outside the UK and that there is a strong value argument for property.
Speaking in direct reference to the number of UK property funds that have suspended trading in the past week, he said: “Tenants are still paying rents, space is still being taken, the supply demand balance, which has not suffered from too much speculative building as in other economic cycles, sits in a reasonable place.”
Aberdeen Asset Management, one of the asset managers that suspended trading, has today lifted the suspension on the Aberdeen UK Property Fund and the Aberdeen UK Property Feeder Unit Trust.
Jones said that whilst stock will need to be sold by some of the funds that have suspended investor activity, “even an amount of £3 to £5 billion of sales [€3.5 billion to €5.9 billion) to meet redemption requests is absorbable in the context of overall average activity”.
His comments follow Heartwood Investment Manager, a UK fund house, which on Monday said UK property would not suffer a 2007-style crash.
Jones added that UK property would be particularly cheaper for overseas institutional investors in exchange-rate terms.
Uncertainty in the property market centres on the affect that the Brexit will have on transactional activity, which in turn makes property hard to value.
