Viewpoint – Brexit? What Brexit?
This article serves as the last of my Brexit trilogy, which could be summarized as follows:
- ‘Brexit the brave?’ — The vote is going to be too close to call, but don’t worry, Islamic investors seem keen to still invest even if we vote to leave.
- ‘Brexit from 6,500 miles away’ — What just happened! We have voted to exit, but Malaysian Islamic investors seem okay with it and Islamic finance is already a global business.
- And now ‘Brexit? What Brexit?’
It’s now two months since the vote to leave the EU that shocked many of us. However, the mood within much of the UK property industry is largely business as usual and it really hasn’t dissuaded Middle East investors, whether investing Islamically or not; in fact, ironically it seems to be encouraging even more overseas investment…not what was anticipated. One of the most significant acquisitions over the summer was the reported purchase of insurance giant Prudential’s City of London headquarters at 12 Arthur Street, with the Oman state oil fund stumping up GBP80 million (US$103.6 million) and seemingly taking a positive view on the prospects of the UK finance and insurance sectors post- Brexit.
Meanwhile, an as yet unnamed private Middle Eastern investor has committed to purchase 5 King William Street, again in the financial heart of the City of London, for a reported GBP90 million (US$116.56 million). Hardly a sign of nervousness. Finally, such investment activity is not confined to London alone, with a Qatari investor purchasing a GBP43.2 million (US$55.95 million) retail park in Telford, more than 130 miles from the center of London.
Of course, the fall in the value of the pound sterling has certainly helped. Having spent much of the last seven years fluctuating around a midpoint of US$1.5 or so to the pound, now at US$1.3 a number of our Shariah compliant investors have cited this as a major driver of their investment wishes and are taking a view that the pound sterling will come back over the next five years.
So, as we at 90 North have been saying since the vote: “Onwards and upwards!”