Despite concerns following the outcome of the Brexit referendum, recent UK economic performance has been relatively strong, with the estimated GDP for 2016 at 2.1%. The market “shock” of the Brexit vote has shown itself mainly in exchange rates, with the value of sterling decreasing by almost 14% against the euro over the course of 2016. Quarter 4 2016 has shown a slight improvement, with the FX return up 1.3% in the quarter.
In light of the uncertainty, UK real estate investment volumes fell in 2016 compared to a very strong 2015. Total investment volumes in 2016 is expected to come in just short of £50bn, 30% below 2015 levels.
There have been less “shocks” than initially expected in the aftermath of Brexit. Sterling suffered most, down 14% against euro for the year, but came back by +1.3% in Quarter 4.
In light of the information herein, Friends First has decided to lift the moratorium and re-open the UK Select Property Fund to new money.