High net worth investors positive about post Brexit real estate markets

High net worth investors positive about post Brexit real estate markets

10 May 2019

High Net Worth Investing

Despite uncertainty in the UK real estate market and Brexit worries, Warren Buffet said he was more interested in investing in the UK in comparison to other parts of Europe.  He said he was hoping for a great deal to come out, although, he did not support it, and is interested in large acquisitions in the country. Brexit immigration deal has been opposed by many organizations who state the new regulations will require a salary floor of £30,000 for the migrants, where Scotland is reliant on immigration for keeping the population growth. Currently, only one-third of the population constitutes the working age in Scotland, where some of the highly skilled workers are immigrants and almost 75% of the Scottish businesses were preparing to hire more skilled workers in the coming years and more than 60% of the firms will lack workers to fill the jobs. Most Scottish firms need a timetable to plan beforehand for the changes required in the post-deal phase to invest accordingly.     

Then again, wealthy UK based investors find the uncertainty around the exit will support growth. The UBS global wealth management report that surveyed 3,600 investors and entrepreneurs found with around $1 million investable assets, more than half ( 60 percent) were optimistic about the economy in the post-exit phase and 44 percent were highly positive about the developments in the next 12 months. 41 % were positive over the impact of exit on the UK economy.

Growing Chinese investments

Recently, the European Commission released a report on foreign-owned non-EU companies where 9.5 percent of the companies investing in the EU were found to be based in China, Macau or Hong Kong, that was 2.5 percent in 2007. By the end of 2016, 29 percent of such investments were held by companies based in the US and Canada that was 42 % a decade ago. The highest investment has been made in the UK where it plans to fund British infrastructure projects, rail links, 5G networks, electric taxis, cinemas, and even nuclear projects.

China owns at least 4 airports, 6 maritime posts and 13 soccer teams in Europe, while, the US government has taken a tougher line on investment in the sensitive areas of economy and such investment tumbled in America due to the new tougher restrictions on trade where Chinese FDI declined to $5 bn (as per the Rhodium Group) that was $29 bn in 2017.    

Overseas investment of Chinese firms has undergone multiple cycles of changes where the early outbound investment of the 90s was, mainly, aimed towards Asia and Africa where the business environment was analogous and it found the places beneficial in terms of competitive costs. Since 2000, it ventured the US and European markets, remained unaffected by the 2008 crisis and it’s the western market deals gradually increased and investment in many European countries, mostly Britain increased manifolds. With the drop in the pound, since 2016, new purchases like the $14 billion warehouse Logicor in 2017, the LKK Health Products Group deal, CC Land and many other key real estate deals were made in the UK capital and other cities by the Chinese.

To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com).

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