US hedge fund Marathon is betting on an increase in prices of commercial real estate in mainland Europe as banks and companies leave the UK following Brexit.
The fund, which has $13 bn (€11.6 bn) under management, is on a buying spree of commercial property which focuses on Germany, the Netherlands, France and Ireland in particular. These are the countries that 'have the most stable outlook and are the most likely to benefit from Brexit,' Bruce Richards, co-founder and CEO of Marathon, told the Financial Times in an interview.
He explained why he thinks these countries will benefit from the UK leaving the EU: ‘Many bank service sector jobs will undoubtedly move to Frankfurt and Paris as EU rules will likely require bank employees to be domiciled within the EU when servicing EU clients.’
So far Marathon, a specialist in opportunistic investments, has bought retail space in Germany, residential units in Dublin, and warehouses in France. It has also bought several office properties in the Netherlands in the last few months, in Amsterdam, Utrecht, Rotterdam, Maastricht and other towns, as well as the Zuidtoren building in Hoofddorp, near Schiphol Airport, for over €40 mln.
Richards says he believes London will remain a big financial centre, but many jobs will move to mainland Europe. He also anticipates a 'mild' recession in the UK next year.
Many experts have expressed concerns over the UK property sector following the referendum and the decision to leave the EU. Recently Norway’s sovereign wealth fund, the world’s largest, decided to cut the value of its UK real estate portfolio by 5% because of the 'increased uncertainty' over the consequences of Brexit.
