When, or will, Brexit damage commercial property investment in Essex?
22 August 2016 by Jason Torrance
Following the UK’s vote to leave the European Union there have been numerous forecasts as to the potential ramifications. After the initial drop in the markets and value of the sterling, things have settled down.
This blog is written further to the blog entitled “Property funds: The post-Brexit effect”, written shortly after the Brexit vote in which it was noted that a number of insurance companies had frozen withdrawals from their commercial property funds along with investors withdrawing investments that has seen a 40% rise in commercial property prices since 2009.
Despite the Bank of England reporting at the time of the above blog that the commercial property market was identified as one of the five main risks following Brexit, a recent sentiment survey from the Bank of England indicated that there was “no clear evidence” of a sharp economic slump following Brexit, whilst a poll from the Royal Institute of Chartered Surveyors took that one step further where a majority felt there may already be a “downturn” in the commercial property market in London. For example, demand from overseas buyers was down by a reported net 27%. Estimates suggest that purchase prices had decreased between 10-15% in a matter of days.
However, despite any indications of Brexit having an adverse impact on the commercial property market in London, this has not deterred John Lewis from announcing that a new store will be opening in Chelmsford, Essex as part of the Bond Street Development.
The Development will be anchored by a 120,000 square foot John Lewis store and include new multiscreen cinema and a large underground car park. It represents an approximate £150 million investment by the developer, Aquila Holding, who have recently formally handed over the property to John Lewis to fit out, with the shop due to open in September. John Lewis themselves have invested approximately £18 million into their store. It has also been confirmed that there will be lettings to The White Company, Goldsmiths and Jack Wills. As with John Lewis, this will be The White Company’s first store in Essex.
With this new development close to being opened, and house and home spending in the Chelmsford catchment area estimated to be approximately 15% above the UK average, it appears that commercial property is showing no signs of decline in the area.
Fisher Jones Greenwood has an expert Commercial Property department servicing clients throughout Essex and London. If you are a developer, landlord or tenant and require legal advice or assistance in this field, please get in touch with us.
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