Europe

Fund managers begin chaotic day

Fund managers in the UK have begun a chaotic day ahead, updating investors and starting an adaption to life outside the European Union.

Mike Sales, global co-head of TH Real Estate, the $26bn (£18m) property manager, said that he was “slightly shocked” but that the company had been preparing for the eventuality and it had “identified work streams or areas such as valuation, product regulation, tax and operations among other areas to work through the various issues and consequences”.

TH RE will be updating investors later today in relation to the impacts and the company’s plans.

Sales anticipated that there would be an inevitable period of inertia as a result of the decision.

“Undoubtedly there will be short term market turbulence and that needs to dissipate and become clearer before long-term investors make big decisions.”

However, the fundamental, relatively high yielding of property Sales hoped would put a floor in pricing.

“There’s a ceiling beyond which yields will not move out because property still offers relatively fair value.”

Alan Tripp, head of UK at LaSalle Investment Management, said: “Whilst we view the long term impact of Brexit as being broadly neutral we expect markets to overreact in the short term.

“Early capital market signals seem to indicate that this may well be the case and real estate performance objectives may now come under considerable strain in the next 12 to 24 months.

“However, we have been working closely with our clients, adopting a balanced approach on risk, to streamline their real estate portfolios at this maturing stage of the cycle.”

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