An Irish property tycoon says London’s property market is “tanking by the day” in the wake of Brexit, with financial markets forecasting the second biggest ever collapse in the value of office and retail space in the capital.
Scott Crowe, Chief Investment Strategist at CenterSquare, told Business Insider that financial markets are pricing in a 15% collapse in the value of commercial real estate in London as a result of the Brexit vote.
Bloomberg reports on Friday that Stephen Vernon, chairman of Green Property, said at a conference that London property values are collapsing, creating a potentially “fantastic” buying opportunity.
Green Property, which made a fortune selling Irish property before the bubble collapsed in 2008, has closed its London office for now and is waiting for prices to go lower before re-entering the market.
Crowe told Business Insider: “We’ve gone back and we’ve looked at every single real estate correction in the last three decades in the UK. What the market is pricing in now is the second worst correction in commercial real estate prices after the great financial crisis. It’s on par with the commerical real estate downturn that we actually saw in the early 1990s.”
CenterSquare is the real asset arm of US bank BNYMellon, with approximately $10 billion (£7.9 billion) in assets under management.
Crowe says his view is stock markets are “over discounting” the fall in London office and shop space value. He says: “What we’re seeing right now is the market is forecasting a 15% plus decline in real estate values, which we think is unrealistic.
