There was quite a lot of carnage in the London listed real estate market today. As of writing, the FTSE 100 index was down about 3% compared to market close yesterday. Land Securities and British Land were down 15.6% and 19.6% respectively. Even more London-exposed companies such as Derwent London and Great Portland Estate were down 24.6% and 22.1% respectively. The Berkeley Group was down around 20% with other volume housebuilders such as Bovis, Bellway and Persimmon faring even worse. Closer to home, Savills was down 21.3%.
History tells us that price shifts in the listed real estate markets tend to precede appraisal/price changes in the private markets. Of course, as well as experts, the capital markets can be wrong. With the bookmakers, they anticipated a Remain vote. William Goldman’s right again. It will be interesting to see what happens to the monthly and quarterly performance measurement valuations due next week. As ever, valuers are in a tough situation. Deals have not occurred yet that quantify how much real estate asset prices have changed. But, you wouldn’t need to employ a migrant knowledge worker to know that they have.
If I were to bet, as an English speaking financial centre, Dublin real estate is probably going to fare much better than anticipated over the next few years – albeit it just got about 5% more expensive for sterling investors. If Scotland were to stay in the EU, Edinburgh would benefit for similar reasons.