{"id":1043,"date":"2018-01-19T11:59:18","date_gmt":"2018-01-19T16:59:18","guid":{"rendered":"https:\/\/www.lee-associates.com\/pennsylvania-dev\/?p=1043"},"modified":"2025-04-21T13:02:22","modified_gmt":"2025-04-21T17:02:22","slug":"were-enjoying-pretty-significant-popularity-were-in-vogue","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/easternpa\/2018\/01\/19\/were-enjoying-pretty-significant-popularity-were-in-vogue\/","title":{"rendered":"&#8220;We&#8217;re Enjoying Pretty Significant Popularity&#8230; We&#8217;re in Vogue&#8221;"},"content":{"rendered":"<p>By Simon Prichard, Sr. Partner &#8211; Gerald Eve in LinkbyLee&#8217;s\u00a0\u00a0<a href=\"http:\/\/www.linkbylee.com\/category\/london-calling\/\">London Calling<\/a><\/p>\n<p>While the Brexit shock and political instability have left the United Kingdom\u2019s economy subdued compared to other major countries, the commercial property market has been setting new records. The demands on the nation\u2019s top real estate advisors have increased dramatically.<\/p>\n<p>The result has been a boon for Gerald Eve, Lee &amp; Associates\u2019 European strategic ally, which was recently honored as \u2018National Advisor of the Year\u2019 at the prestigious EG Awards, presented by weekly UK commercial property magazine Estates Gazette.<\/p>\n<p>\u201cReflecting on the UK market, certainly after talking to the CEOs and senior partners of the top ten firms here, we\u2019ve all had quite a good year. Better than we anticipated,\u201d said Simon Prichard, Senior Partner of Gerald Eve, which has 470 brokers and staff in nine offices across the U.K. and alliance partners in more than 20 European countries.<\/p>\n<p><a href=\"https:\/\/www.lee-associates.com\/easternpa\/wp-content\/uploads\/sites\/83\/2018\/01\/Simon-Prichard_125.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-1044\" src=\"https:\/\/www.lee-associates.com\/easternpa\/wp-content\/uploads\/sites\/83\/2018\/01\/Simon-Prichard_125.jpg\" alt=\"\" width=\"505\" height=\"416\" \/><\/a><\/p>\n<p>Speaking with Link following his re-election to a three-year term, Prichard expressed his views on the broad challenges and opportunities in the UK commercial property market following the Brexit vote and subsequent devaluation of the British pound. He also touched on the economic climate, the effects of Chinese capital in commercial property and the outlook for Europe and U.S. markets.<\/p>\n<p>On Brexit, he said: \u201cThe real estate sector was very much on the \u2018remain\u2019 side of the argument, but we live in a democracy and you can\u2019t always get your way. We\u2019ve dealt with the initial shock, and the general feeling now is one of \u2018getting on with it\u2019.\u201d He also acknowledged the surge of foreign investment into the UK commercial property, particularly from China, that followed the vote to leave the EU.<\/p>\n<p>\u201cThe market feels a bit toppy. Not just real estate, but across a lot of asset classes. We\u2019re seeing super-hot yields and Chinese money chasing trophy assets across the country, particularly in London. Look further afield and nearly every city worldwide looks expensive. Many locations feel toppy,\u201d he said. Prichard added that incremental rate increases from European central banks are likely to start in mid 2018, and will reach 3.5% to 4% in due course.<\/p>\n<p>\u201cWhen the amount of quantitative easing that Europe has seen takes place, there\u2019s a certain inevitability that you\u2019ll see inflation. We\u2019ve certainly seen inflation increase across Western Europe, and as a consequence I think we\u2019ll see interest rates start to rise in the first half of this year. They\u2019ll plateau around 4% in time, but generally the outlook is fairly benign,\u201d he said.<\/p>\n<p>\u201cWhat has changed in the last six months is with second tier assets. If you have an investment with a bit of a wart, or uncertainty around it, the yield is pushing out and the price you\u2019re asking is not achievable. People are more discerning. They\u2019re taking longer to look at things.\u201d<\/p>\n<p>Prichard also said he believes that Beijing will increase currency controls, curtailing activity everywhere.<\/p>\n<p>\u201cThere isn\u2019t the competitive tension and pressure on assets that was present over the last three or four years. But something that is Class A will be fine and will demand a global premium,\u201d he said.<\/p>\n<p>Asked how the U.S. economy is positioned in a world in which the IMF forecasts contraction in 2018 in the economies of only a handful of nearly 200 developed countries, Prichard said solid economic fundamentals make the U.S. a leading competitor for big blocks of foreign capital, he said, adding, \u201cProviding you don\u2019t do anything stupid.\u201d<\/p>\n<p>\u201cWe\u2019re probably more fixated about Donald Trump than you are. We\u2019re always interested to find out what he said or what he\u2019s done or what he\u2019s about. The US has value in the world and its actions can have a disproportionate effect elsewhere. There\u2019s always that concern that if the US sneezes, the rest of the world catches a cold,\u201d he said.<\/p>\n<p>Of course, the UK has its own issues. The nation faces a possible \u00a350 billion taxpayer cost to split from the European Union and continued political aftershocks that look to topple Prime Minister Theresa May and the Conservative Party from power.<\/p>\n<p>\u201cThe UK is in a bit of a fog, and Europe is benefiting at the moment from international investment in a way it perhaps hasn\u2019t done in four or five years. This improvement has largely been on the back of the perception that the economies are strengthening, also bearing in mind that the European economies fell further than the U.S. and UK and are coming from a lower base in the last ten years, he said.<\/p>\n<p>\u201cIf you want to buy in Madrid or Paris, you\u2019re still down to 3.5 percent yields. These are super-hot yields that I haven\u2019t seen in 30 years of real estate. Every major city around the globe is expensive.\u201d<\/p>\n<p>But it\u2019s the nation\u2019s politics and an imminent change in policies that has the business community on high alert. \u201cWhat UK business is really focused on is the very real possibility that the Labour Party has gone from a political joke to forming the next government, and its left-wing leader Jeremy Corbyn becoming Prime Minister.<\/p>\n<p>\u201cSociety is polarized, and Labour is capitalizing on this friction,\u201d he said. \u201cThere\u2019s talk of a wealth tax and transaction tax,\u201d he said, referring to a proposed 0.5% levy on financial trades, being termed a \u2018Robin Hood tax.\u2019 Advocates claim it would raise \u00a326 billion, while opponents say it will shrink the economy and erode the City of London\u2019s influence as a financial centre.<\/p>\n<p>\u201cIt\u2019s interesting. For the first time, we\u2019ve had two clients ask us to do viability studies regarding relocating their business to Dublin, Luxembourg, Amsterdam or potentially the United States, and had discussions about adding a clause to leases and renewals, enabling the tenant to break an agreement in the event of a change in government or new taxes. Let\u2019s call it a \u2018Corbyn Clause,\u2019\u201d he said. \u201cPeople are asking for it. It\u2019s one of the things I think we\u2019re going to see creeping into leases.\u201d<\/p>\n<p>Prichard said Gerald Eve advises the Bank of England on real estate and is recognized among the nation\u2019s leading full-service real estate advisors. \u201cI think we have quite a robust business model. We\u2019re like Lee &amp; Associates, a partnership structure, enabling us to, dare I say, align and long-term think,\u201d he said.<\/p>\n<p>\u201cWe\u2019re enjoying pretty significant popularity at the moment. We\u2019re in vogue. We\u2019re working on mandates for Goldman Sachs, we\u2019re working for Credit Suisse and JP Morgan, which ordinarily would be the domain of CBRE, JLL and Cushman. We\u2019ve certainly been able to upscale our client booking in the last few years.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Simon Prichard, Sr. Partner &#8211; Gerald Eve in LinkbyLee&#8217;s\u00a0\u00a0London Calling While the Brexit shock and political instability have left the United Kingdom\u2019s economy subdued compared to other major countries, the commercial property market has been setting new records. The demands on the nation\u2019s top real estate advisors have increased dramatically. The result has been a boon for Gerald Eve, Lee &amp; Associates\u2019 European strategic ally, which was recently honored as \u2018National Advisor of the&#8230;<\/p>\n","protected":false},"author":24,"featured_media":490,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-1043","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.7 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>&quot;We&#039;re Enjoying Pretty Significant Popularity... We&#039;re in Vogue&quot; - Eastern Pennsylvania<\/title>\n<meta name=\"description\" content=\"While the Brexit shock &amp; political instability have left the UK\u2019s economy subdued, the commercial property market has set new records. 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