Since the Brexit debacle, UK property investments have dropped out of favour among professional valuers and “herd following” investors alike.
As an investor, should you be paying any attention to these property doomsday naysayers? Let us look at both sides of the coin, the current ground realities as well as the prevailing sentiment.
Even though registered REITS (real estate investment trusts) in the UK are shying away from property investments, international buyers are pouring money into the UK commercial property scene without hesitation.
In fact, just in March 2017, a Chinese property company bought the Cheesegrater for a whopping £1.135 billion, at only a 3.45%n yield. As it turns out, this price is 26% more than its recent September valuation. A Honk Kong investor purchased the Walkie-Talkie for a smooth £1.3 billion, which is 13% over the book value. What’s interesting is that the seller, Landsec, was trading at a 29% discount to NAV.
These prices certainly surprised the naysayers. Perhaps some have an overly negative outlook because they feel major financial companies will walk out on London for European capitals or Wall Street.