Brexit Boris Boost


After four years of living and breathing the Brexit will we/won’t we debate, as you read this the UK will be out of the EU. What surprised me after so much strong feeling (to put it mildly) on both sides of the discussion over the years is that it’s all gone quiet. Quite literally in the case of Big Ben which Boris Johnson had hoped he could get to chime in the UK’s new independence, but to no avail. For most it’s a sense of relief that life is getting back to normal.

With a combination of Brexit certainty, albeit with a trade deal still to go with our European friends, and a comfortable majority for the Conservative-led government, the CBI report that business optimism among manufacturing companies is at its highest level for nearly six years and was the biggest quarterly swing in sentiment from -44% to +23% since they first started recording in 1958.

So much capital investment had been put on hold while these uncertainties were hanging over companies, that the taps are now being reopened. Meanwhile, annual house price growth which had been drifting towards 0% leapt by the end of December to 4%. Both companies and individuals are spending money again.

And so it is with Islamic investors as well. The belief that there was pent up demand is being realised. With the odd exception, the investors we speak to are largely back on the UK and keen to see opportunities, whether that it’s in the office, logistics or student accommodation sectors. Very few are brave enough for retail just yet.

While we’re only one month into 2020, realised transaction activity is also encouraging both north and south of the Scottish border, with ADIB UK financing both a healthcare facility in central London owned by an Abu Dhabi investor and supporting a Bahraini investor with their acquisition of a logistics asset in Edinburgh, and GFH from Bahrain acquiring a GBP39 million (US$50.94 million) office business park to the northwest of London.

While the trade deal with Europe is one to watch as the year pans out, for the moment all 2020 graphs are going up.

This article was first published in Islamic Finance news dated 5th February 2020.