LONDON – Standard Life’s real estate investment trust has sold its last City of London property, amid fears the financial capital will be hardest hit by Brexit.
The group sold its “largest and only City of London asset at White Bear Yard, in order to realise profit and remove the risk of potential future underperformance,” it said in a statement to investors on Thursday.
Standard Life sold White Bear Yard, a coworking space home to well-known tech investment fund Passion Capital, for £19 million in May.
The fund, which has £418 million of property assets, is concerned that the loss of London’s status as Europe’s financial centre post-Brexit will weaken commercial real estate values.
“From a geographic point of view, the portfolio has no exposure to the City of London, forecast to be one of the weakest markets due to the uncertainties over how Brexit will affect the financial services industry,” the company said.
Banks and other finance firms have begun shifting operations to Frankfurt, Paris, Amsterdam and Dublin in preparation for the UK’s exit from the European Union’s single market.
The number of newly available jobs listed in the UK’s financial centre fell 11% in July year-on-year to 7,080, according to a survey by Morgan McKinley. The number of people seeking jobs also dropped by a huge 33% from July 2016, while month-on-month that figure is up 1%.
Global recruitment firm Hays said on Thursday that it saw a 10% fall in London revenues in the wake of last year’s Brexit referendum.
Robert Peto, the chairman of Standard Life Investment’s Property Income Trust, said on Thursday: “Following on from the surprise EU referendum outcome in 2016, the UK general election, called with the intention of strengthening the Government’s hand in Brexit negotiations, unexpectedly produced a hung parliament.
“This result, on top of the fact that Brexit negotiations have started with vastly differing views on what the eventual outcome will mean for the UK, has resulted in a background of political uncertainty not seen in this country for a generation.”