Appleby’s MIPIM team comprising James Gaudin and Kevin McQuillan from Appleby Jersey and Kyle Sutherland from Appleby Isle of Man returned unscathed from Cannes after a very busy, and largely sunny, few days pounding La Croisette. The week generated some common themes:
The B word
Brexit continued to dominate much of the narrative. On our analysis sentiment was generally positive about the potential deal being struck and the resulting impact on the real estate market, despite the choppy political and regulatory waters that lie ahead. By the time MIPIM rolls around next, in March 2019, the Brexit deal will be close to done and the market can finally deal with the realities of a post–Brexit world - the first of which may well be longer immigration queues at Nice Airport.
Resurgent regions
With the London market looking flat after a bumper few years, domestic and foreign investors are exploring the possibility of acquisitions in the regions in their relentless pursuit of yield.
REITs on track
Real Estate Investment Trusts (REITs) are expected to return to prominence. REITs represent an inherently flexible way to hold a diverse range of UK or international real estate assets and benefit from the certainty of well-established UK tax treatment. Appleby in the crown dependencies is seeing significant demand for listing services for REITs on The International Stock Exchange (TISE) as a result of a simplified listing process. Appleby Securities (Chanel Islands) Limited is a listing sponsor on TISE.
Changes afoot
Proposed changes to the treatment of overseas investors capital gains tax on gains arising from the disposal of UK commercial property which are due in January 2019 was a topical discussion point. Most market participants remain confident that UK real estate as an asset class will remain attractive for foreign investors. The weak pound and likely exemptions to the new regime are likely to drive interest at what will be a crucial time for the UK economy. It is clear that investors and advisors across the sector have taken time to carefully respond to the consultation and remain hopeful of an outcome that will not have an overly detrimental impact on the sector.
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