Over recent years 22 Bishopsgate (prime City of London office space) has suffered more than most from the volatility of sentiment towards the UK commercial property market. Work originally started on the site to develop ‘The Pinnacle’ (945 feet tall) but these plans fell victim of the last recession in 2012. New plans were then submitted last year for a simpler design which would have made it the tallest building in the City of London. However, in the immediate aftermath of the UK’s vote to leave the EU, owner AXA announced that they were “considering their options” in relation to the development of the site.
Brexit has not really had a detrimental impact on equity markets in the short-term, in fact quite the opposite. Yet commercial property is often seen as a barometer for the health of an economy, as demonstrated in 2007 when values fell by 44% from their peak in the space of two years. Whilst this decline was somewhat less than the 1970s decline it was on a par with the crash experienced during the 1990s. In this overview we assess the potential impact of Brexit on commercial property in the UK over the coming years.