A property company managed by Schroders Plc is bidding for an office building in Frankfurt, anticipating that the banking fallout from Brexit will boost values in the German financial centre.<\/p>\n
The London-based property investor isn\u2019t alone in preparing for an exodus from the British capital, with both CBRE Global Investors LLC and Standard Life Plc seeking to purchase office space in cities from Dublin to Amsterdam.<\/p>\n
\u201cThe potential additional growth as a result of companies relocating from the UK enabled us to be firmer on pricing and financial underwriting,\u201d Tony Smedley, a fund manager at Schroders, said of the proposed Frankfurt acquisition by Schroder European Real Estate Investment Trust Plc.<\/p>\n
About 70,000 jobs could\u00a0leave<\/a>\u00a0the UK finance industry if the government sacrifices unfettered trading access to European markets to regain immigration controls, according to lobby group TheCityUK. Those seeking to move overseas face a problem – the lack of development and growing domestic demand has already pushed vacancy rates for prime space in the business districts of Paris, Frankfurt and Amsterdam to the\u00a0lowest<\/a>\u00a0levels in about a decade, according to broker Savills Plc.<\/p>\n Real estate investors are now seeking to capitalise on that shortage by buying partially vacant offices and plots with the potential to develop buildings the banks may need.<\/p>\n \u201cWe believe that there will be strong occupational demand\u201d from banks and financial services companies, said Jeremy Plummer, chief executive officer for Europe, the Middle East and Africa at CBRE Global Investors, which manages about $88.6 billion of real estate globally. \u201cWe believed that before Brexit, but we believe it even more now because of the inquiries coming from companies seeking to locate some functions in other locations.\u201d<\/p>\n Schroder European Real Estate Investment Trust raised funds through a share placing this month to purchase about 150 million euros ($165 million) of assets throughout Europe. The company is positioning to \u201ccapitalize on any structural change which may result from a progressive shift of occupiers from the U.K. to major EU cities,\u201d according to a statement.<\/p>\n It has already bought a number of German properties and would have bid for the Frankfurt office regardless of Brexit, Schroders\u2019s Smedley said. He declined to identify the building.<\/p>\n Bottom of Form<\/p>\n The financial crisis curbed development in many European cities and so now it\u2019s time for investors to take more risk, according to James Rushworth, who oversees about 4 billion euros of assets as European property director at Standard Life. Demand will outweigh supply, pushing up rents, he said. The company is in the process of raising about 300 million euros for a new European property investment fund.<\/p>\n In Amsterdam, banks have already put \u201cpreviously vacant swathes of modern office space under option\u201d in case London based institutions lose the right to conduct business throughout Europe, Mike Prew, an analyst at\u00a0broker Jefferies Group LLC, wrote in a September 26 note after a visit to the city. He declined to comment further.<\/p>\n \u201cThere are a number of reasons why Amsterdam in particular could do well,\u201d Standard Life\u2019s Rushworth said. \u201cIt has that historic global trading outlook like London, good connectivity, it is attractive as a place to live, it has good quality transport, it has a well-educated population and English is so well spoken.\u201d<\/p>\n France\u2019s labour and tax laws make Paris a less popular bet among investors seeking to build new homes for bankers, CBRE\u2019s Plummer said. It is also expensive, with prime yields lower than those in London\u2019s financial districts, making it less attractive to buy existing buildings.<\/p>\n Still, it will probably receive a boost because French banks currently have significant operations in London and, if they were to move, they would most likely head for Paris, said Wolfgang Behrendt, head of global real estate for Europe at UBS Group AG\u2019s asset management unit. That suggests no single city will emerge as a clear winner from Brexit, he said.<\/p>\n \u201cIn the current situation there is too much dust in the air to have a clear view,\u201d Behrendt said. \u201cOne thing is clear, to build up Frankfurt or Paris or Dublin to be on a similar scale to London would take about 20 years.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" A property company managed by Schroders Plc is bidding for an office building in Frankfurt, anticipating that the banking fallout from Brexit will boost values in the German financial centre. The London-based property investor isn\u2019t alone in preparing for an exodus from the British capital, with both CBRE Global Investors LLC and Standard Life Plc […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-2063","post","type-post","status-publish","format-standard","hentry","category-news","category-uncategorized"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9PjAq-xh","_links":{"self":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/2063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/comments?post=2063"}],"version-history":[{"count":0,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/2063\/revisions"}],"wp:attachment":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/media?parent=2063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/categories?post=2063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/tags?post=2063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}