Commercial property auctions are emerging as an unlikely bright spot in Britain’s real estate market where a steep drop in sterling has attracted overseas buyers and local investors are as yet unfazed by potential fallout from Brexit.
Britain’s £900 billion commercial real estate market bore the brunt of the financial market turmoil that followed Brexit. Retail investors quickly pulled money out of commercial property funds just after the vote resulting in a temporary freeze on £18 billion in assets.
In July, British commercial property values fell by 2.8 per cent, according to the IPD real estate index compiled by MSCI , the biggest fall since March 2009, highlighting a sharp drop in investor confidence. Average commercial property values have fallen around 3.5 per cent since the June 23 vote and year-to-date returns tracked by the IPD index are hovering below zero.