Brexit pause


The fear of writing about Brexit is that by the time it’s published, the situation has probably changed, but choosing not to delve into the pros and cons and certainly not the politics that is deeply entrenched in the whole debate, I’m probably on safer ground and will focus on “Just the facts, ma’am”.

The simple fact is that for a great many Islamic investors their investment plans for the UK are now on hold, it being just too close to the final whistle (possibly) to make new decisions. However, looking back over the past two years, Brexit has been largely positive for capital flows with the weaker pound sterling being pounced upon by many, particularly those with a longer-term hold in mind.

As those who follow the foreign exchange markets will know, the best time to have switched into the pound sterling was the back end of December last year, as (at least at the time of writing) it has strengthened more than 5% since. Many investors may well have done just that, but are choosing to wait before deploying such funds.

As you would imagine, this topic of conversation is very frequent with our investors and those who have decided to now wait almost without exception plan to reinvest in the UK once certainty is re-established.

In the meantime, Shariah compliant investors are also looking elsewhere. Our own 90 North has recently closed a number of office acquisitions in the Netherlands with our equity partners, the details of which will soon follow.

Elsewhere, the US continues to be popular with Middle Eastern investors, confirmed in my recent visit to Saudi Arabia where the volume of appetite seemed to have grown.

Diversification remains key to many, with Australia increasingly interesting for Middle Eastern and Asian investors alike. As I’ve shared before in this column it has been under the radar for too long, with a vibrant economy and a critical mass of Islamic professionals to make Shariah compliant investment a reality there.

So we hope, among innumerable others, for a resolution to the Brexit conundrum and for a return to business as usual. The flow of Islamic capital into UK real estate is only on pause. Very few have pressed the stop butt on.

This article was first published in Islamic Finance news dated 14th March 2019.