The 23 June 2016 was a dark day for the UK commercial property industry. The UK’s unexpected vote to leave the European Union (EU) unleashed a day of chaos on the markets. Among the hardest hit shares were those in UK property: as investors rushed for the exit the value of real estate investment trusts (Reits) plunged 23 per cent from their referendum day closing price over the following two trading days.
But leaving aside the initial shockwave, many early estimates of the likely effects of the Brexit vote on commercial real estate performance have so far proved wide of the mark. Yet the sector faces another D-Day on 29 March 2019, when the UK is scheduled to leave the union two years after triggering Article 50. As it stands, that will – according to the law of the land and lack of any consensus between UK lawmakers and EU negotiators – be without a deal. And just as was the case in the run-up to the referendum, those wishing to maintain the status quo – or at least, something that looks quite like it – are predicting an economic meltdown that will see businesses flee the UK or left in a financial wilderness that will force many to shut their doors.