According to reports, the uncertainties of the UK’s departure from the European Union (EU) has not totally affected UK’s residential property sector.
Total investment volumes in the U.K.’s multifamily sector rose by more than 150% to 6.8 billion euros (US$7.6 billion) in 2018. London led the charge with investment volume nearly doubling to 2 billion euros compared to 2017, and became the fourth largest European city for multifamily investment, behind Berlin, Copenhagen and Paris.
Investment in European multifamily properties rose by 40 per cent to 56 billion euros in 2018. The market has proved popular among investors because of the stable cash flow from such buildings and a shortage of supply in Europe’s top-tier cities.
Still, industry players felt that there some foreign investors have become more cautious, especially since the uncertainty around Brexit continues to build.
In other Brexit news, US property company WeWork, founded by billionaire entrepreneurs Adam Neumann and Miguel McKelvey, is being paid €62m (£55.7m) in “financial inducements” as part of the Brexit-enforced relocation of the European Medicines Agency (EMA) from London to Amsterdam. The EMA is currently in a temporary building in Amsterdam until completion of the construction of its new premises at the end of 2019.
WeWork secured the cash from British and European taxpayers as part of a deal in which it will sublet the agency’s former headquarters.
All UK-based EU agencies have to relocate to other member states as a result of the UK’s decision to leave the EU. The Netherlands won the right to host the EMA while Paris secured the European Banking Authority. But before its move to the Netherlands, the EMA failed in its bid to break its 25-year lease with its landlord, the Canary Wharf Group.
The EMA had had been facing £500m in costs, including an annual rent of €16m, on 26,000 sq metres (280,000 sq ft) of office space at 30 Churchill Place in Canary Wharf in London that it was unable to use.
The subletting deal with WeWork recoups an undisclosed amount of those costs but EU budget documents record that at least €62m has been paid to the US firm in an attempt to make the deal attractive. The sum covers the costs for 2019-20.
The EMA’s efforts to sublet the property had faced rising competition in London’s commercial subletting market as a result of businesses reducing their footprint in the capital in the light of the Brexit vote.
Nine years after co-founding WeWork, Neumann, 40, its chief executive, and 45-year-old McKelvey, as chief culture officer, are reportedly worth $7bn between them. The company leases large office spaces, divides them up and rents them out in smaller portions to businesses offering perks such as free coffee and beer.
WeWork, which operates in 27 countries and is preparing for a stock market flotation this year, is second only to the British government as an occupier of London offices, with more than 275,000 sq metres of space in the capital.