Trump's victory could give London's commercial real estate markets a welcome shot in the arm, Elisabeth Troni, head of EMEA research at Cushman & Wakefield, has said in the wake of the US elections.
As far as global investors are concerned, buying UK property may now look less risky than acquiring US assets and could 'go some way towards normalising the Brexit-like movement, or at least take the focus off the UK for a short period, which perhaps allows investors to realise that the fundamentals in London are still relatively robust', Troni said.
'The shock of a non-consensus event such as this is likely to result in increased volatility in the financial markets in the coming days and weeks. However, as we have learned from other recent shocks, short-term volatility in the financial markets doesn’t necessarily translate into any immediate or meaningful impact on the economy or the property markets,' she added.
Troni compared the US election result to the UK referendum, saying that 'the vote for Brexit delivered an immediate shock, but since then UK economic data has held up relatively well'. She pointed out that Trump won’t take office until 20 January, 2017 and is likely to 'try and calm markets via conciliatory speeches, the nomination of key officials, and the setting out of his legislative priorities' in the meantime.
Business as usual
Separately, Troni commented that the US is unlikely to encounter the same kind of liquidity crunch that affected the UK after its referendum on EU membership. She also noted that for much of Europe, it would be business as usual.
'Unless there is a material deterioration in economic conditions, market conditions across the UK and Europe are unlikely to change. Markets that are currently tight and experiencing upward pressure on rents, such as Barcelona, Dublin and Munich, will continue to do so and soft markets, such as Moscow, Istanbul and Warsaw will remain soft,' she said.
'Europe is broadly in recovery as labour markets are healing. Rents are rising for prime space in many capital cities including Berlin and Madrid. Occupier demand in EMEA was unaffected by the Brexit vote which was also a shock result. Demand for commercial space in London has been dented by Brexit and there has been a contraction in business investment, but outside London things are ticking along well.'
Brexiteers have also heard that Trump may give the UK a better chance of amplifying its trading relationship with the US, in contrast to a Democrat presidency. President Obama had underlined on more than one occasion that the UK would be seen as a stronger trading partner if it stayed in Europe.
