London’s office property market ‘tanking’, says Green Property chairman Stephen Vernon

London’s real estate market, hurt by the Brexit vote, is “tanking by the day,” Green Property chairman Stephen Vernon said.

The firm, which has closed its London office, is waiting for an opportunity to buy into the market at lower values, he said at a conference in Dublin.

Mr Vernon would consider buying a real estate firm, raising a fund or buying a portfolio of assets in London, he said. “It’s absolutely fantastic what’s going on,” said Mr Vernon, who sold most of the firm’s properties in Ireland before the market there crashed in 2008.

Office values in the City of London financial district fell the most in at least seven years in July after Britain voted to leave the EU. Home prices in the UK capital fell for a fifth month in August, the worst streak since 2009, as higher taxes and the referendum result damped demand.

The outcome of the vote, higher levies on business premises and an increase in the stamp-duty sales tax have led to a reduction in London commercial property values, Derwent London chief John Burns said yesterday in a statement.

“The central-London office market faces a number of challenges, including heightened global uncertainty, and business activity is likely to slow,” he said.

Developers tried to capitalise on rising rents by starting work on a record number of central-London office projects in the six months through March. That makes oversupply a threat to the market, UBS Group said in August.

More than 1,900 firms will probably review their office-space requirements in the UK capital following the vote, real estate researcher DealX said in July. International businesses could shift as many as 100,000 jobs away from London within two years of the UK officially starting a process to leave the EU because they risk losing their passporting rights, Jefferies Group analyst Mike Prew said in June.

That could cause demand for office space to fall, hurting rents and prices.

— Bloomberg