3. AN EXTENSION TO THE DATE AT WHICH THE UK LEAVES THE EU

Boris Johnson has said he would rather “die in a ditch” than seek another extension to the deadline by which the UK has to leave the EU. But Parliament seems to have tied his hands, passing legislation that says he can’t leave the EU without a deal unless it says so. If he can’t leave without a deal, and can’t get a deal, then an extension to the deadline of perhaps another six months seems inevitable. 

For UK commercial property, that would seem to lead to an extension of the stasis gripping the investment market. Data from Avison Young shows that London investment in the first three quarters of the year is down more than 50% on the same period in 2018, and Real Capital Analytics data shows a similar pattern for the UK as a whole in the first half of 2019. This week Real Capital Analytics said liquidity in the London investment market is at its lowest ebb since 2009. 

Most investors seem to have a mantra: Until there is clarity, why take a risk?

“At the moment, Sterling assets are not massively investable,” M7 Chairman Richard Croft said. “I’ve had three or four investors say they would love to invest in the UK, but at the moment they are just waiting.” 

Occupier markets have held up well so far in the face of Brexit uncertainty, but recent economic data shows a weakening of the UK economy which could start to impact office takeup. 

But this limbo cannot go indefinitely. Eventually the UK will either need to leave the EU, with or without a deal, led by either the current government, or a new government following a general election. 

If you think the UK leaves the EU with a deal, go to section 1.

If you think that the UK leaves the EU without a deal, go to section 2.

If you think that there is a short extension to the Brexit deadline date to facilitate a general election, go to section 4.

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