It's not all gloom and doom for UK property stocks as share prices recovered some of the ground lost in the aftermath of the Brexit vote during trading on Tuesday.
Land Securities was the biggest winner over the day with a rise of 8.6%, with British Land, its nearest peer in size, recording a gain of 6.4% by at the close of trading. Other winners included Great Portland Estates and Derwent London which climbed 6.1% and 6.3% respectively.
Shopping centre owner Hammerson finished the day +5.8%.
UK property stocks have booked an average loss of over 27% so far in June, according to data from GPR. Without exception, the leading listed real estate specialists tumbled a day after the news that the UK had voted to leave the EU, chalking up losses of as much as 10-25% on Friday. Many of them remained in negative territory on Monday but regained ground on Tuesday.
London office specialists like Derwent London and Great Portland Estates were among the hardest hit due to fears that job losses may be on the cards in the financial sector. The big threat is that a number of foreign banks and insurers have said they would shift part or all of their organisations to the Continent should the UK vote for a Brexit.
However, some experts believe fears of an exodus of banks from London in the near future may be exaggerated. 'Financial institutions will not spent millions of euros to relocate operations into the EU before the details of the Brexit are hammered out,' said Thomas Veraguth, head CIO Swiss & Global Real Estate Strategy at UBS. 'Since the negotiations will probably last at least two years there is no imminent danger of rental losses for owners.'