November 15, 2016

The Presima Globetrotter

With all the news flow surrounding the recent U.S. presidential election, the ever-unfolding Brexit story finds itself bumped to the back pages.  But Brexit still deserves investors’ attention, not only because of the opportunities that still exist, but also for the lurking risks (“hard” Brexit, Parliamentary vote, etc.) that defy traditional underwriting and valuation processes.

The November 8 U.S. presidential election and the June 23 Brexit vote have a few things in common.  First, the polls running up to both votes proved to be flat out wrong, flummoxing pollsters and investors.  Second, asset prices suffered an initial plunge, and subsequent recovery.  (Though in the case of Brexit, prices recovered partially after two days, while in the case of the Trump victory, they bounced back up after only two hours.)  And finally, after much handwringing before and immediately after the vote, political leaders (and investors) began the process of moving on.  While of course these are two very different situations, the parallels and investing takeaways are hard to ignore.

This edition of the Presima Globetrotter explores how the Brexit vote has impacted the UK’s REIT market over the last few months, identifies remaining opportunities, and highlights challenges that the market still faces.  Please feel free to contact us with any questions or comments.

The Presima Globetrotter: Brexit: lessons and opportunities in REITs