Post-Brexit fluctuations in the real estate market are likely to be “shorter-lived and less severe” than many investors expect, according to LaSalle Investment Management, and may offer "higher-yielding" opportunities to investors.
In their mid-year Investment Strategy Annual 2016, LaSalle said the correction in real estate pricing will likely be “largely restricted to the UK” over the coming year and a half.
Additionally, LaSalle expects medium-term capital inflows “will only be interrupted, not reversed”, and capital repricing in the UK may lead to an ideal environment for foreign investors looking to enter that market, according to the firm's global head of research and strategy Jacques Gordon.
“Turmoil in capital markets might also open higher-yielding buying opportunities from distressed sellers as the implications of the Brexit vote in the UK ripple around the world,” he said.
Mr Gordon also said investors should look for similar opportunities in other global markets.
“Although the UK has been the epicentre for political and financial tremors since June 24, the law of unintended consequences suggests that investors should also closely watch for ripple effects in the EU, North America and even all the way to Asia-Pacific,” he said.
The report found that Brexit “fallout” in the Asia-Pacific region would be limited, noting that “intra-regional trade has outpaced trade with other parts of the world since the GFC”.
LaSalle head of research for Asia-Pacific Elysia Tse added that ongoing economic instability elsewhere in the world would likely make Asia-Pacific opportunities more attractive.
“If more volatility or uncertainties arise in other parts of the world, Asia Pacific’s relatively stable collection of nation states and treaties could be viewed more favorably by international investors,” she said.
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