David Wise said that although returns in London are not expected to fall due to the impact of the EU referendum, he does believe that Brexit poses a risk to London’s short- to medium-term outlook.
“At present, regional markets are showing no signs of slowing.
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“Tenants are signing new leases and paying modestly higher rents, and even if this were to change, we are better insulated than competitors as we don’t need to be seeing rental growth to deliver attractive returns.
“London is the big risk when it comes to Brexit, although it was already a long way through its rental cycle and was probably due a slowdown anyway.
“The depreciation of sterling has and will underpin the London market, so returns will not fall off a cliff, but it will likely be a market that it’s better to be out of for the next year to 18 months.”
Kames Capital is a specialist investment management business.
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