The property sector in the UK can thrive post-Brexit with the vast majority of business leaders confident about the future when the country leaves the European Union in March 2019.
Some 70% of real estate sector leaders believe the UK is strong enough to be independent, 84% have experienced no change to EU operations or trade since Article 50 was triggered and only one in five have taken actions to mitigate against potential risks.
However, the research by Shakespeare Martineau also found that 80% agree that immigration is required to fill the skills gap and one in seven are planning to or have already pulled a project due to Brexit.
Overall, the initial optimism is countered by wider worries about immigration and trade. Most of the property businesses believe that the skills gap in the sector is likely to increase as access to skilled labour becomes more difficult. The effects of the skills gap will be felt not only by construction businesses, but also by areas such as planning, engineering and surveying, the firm says.
The real estate sector is aware of the risks posed by Brexit to long term project work. Whilst some respondents stated they were planning to or have already pulled a project due to Brexit, a significant number are primarily UK focused and as such only 6% are moving functions or operations from the UK.
‘Ever since Article 50 was triggered, the social and political environment has been markedly unsettled. There is still a worrying amount to negotiate in a tremendously short time. One thing is for certain, Brexit will change the way business is conducted in the real estate sector and across the UK as a whole,’ said Adrian Bland, head of commercial real estate at Shakespeare Martineau.
‘The value of commercial real estate is intrinsically linked to the prosperity of the economy. The industry contributes over £94 billion in the UK each year. The investment it attracts encourages growth, productivity and is a catalyst for urban regeneration. Real estate will play a crucial role in constructing an optimistic future for the UK outside of the EU. The prosperity of this highly entrepreneurial sector is essential for the success of the economy as a whole,’ he explained.
‘Many mid-market businesses have experienced pressure as a result of uncertainty created by Brexit. However, whilst other sectors prefer waiting for clarity, the real estate industry is highly cyclical and its entrepreneurial people react rapidly to change as it happens,’ he added.
Real estate business leaders are confident in the performance of the post-Brexit market and only one in five have taken actions to prepare themselves from possible risks resulting from Brexit.
Additionally, only 23% have spoken to employees about the potential impacts of Brexit, 21% have analysed different trading possibilities, 18% have compared costs of EU and non-EU suppliers and 14% have examined immigration scenarios.
‘Brexit is unlike anything else we have experience in recent times because it is so intricate and uncertain. Our research demonstrates that, although real estate businesses have shown optimism in the face of Brexit, they need to be prepared for the unprecedented changes ahead, harnessing their innate determination and self-sufficiency,’ Bland pointed out.
‘By developing financial resilience, managing supply chain risk and collaborating with industry peers, the sector can position itself in the best way possible,’ he added.