Brexit looms over UK real estate market
Investors are ditching British real estate as Brexit uncertainty, rising interest rates and inflation erode house prices and office values in a market hurtling toward a potentially messy exit from the European Union. Shorting real estate investment trust (REIT) stocks is gaining in popularity, as the government publishes plans to cope with any disruption if Britain and the EU can’t agree on the terms of its departure. The list of the UK’s top 50 most shorted stocks is peppered with real estate names. They range from REITs Intu (INTUP.L) and NewRiver (NRRT.L) to housebuilders Crest Nicholson (CRST.L) and McCarthy & Stone (MCS.L) to the number one short, Travis Perkins (TPK.L), which sells building materials, Markit data shows. Short interest data from FIS Astec Analytics shows REITs that concentrate on residential and office space have higher share-borrowing activity and costs - a measure of demand to borrow the shares in order to short them. The short - net of borrowing costs - would have been lucrative. British REITs have underperformed their European counterparts by more than 20 percent since the referendum. About 46 percent of London’s 68,000 partly built homes have yet to find a buyer, the most ever, according to property market research firm Molior London. To an extent, the downturn was coming even before the Brexit vote - but uncertainty has accelerated it.
Tags : INTERNATIONAL