REALTORS® in Toronto and Vancouver are pitching Canadian cities as relatively safe property havens now that London, for years one of the world’s leading targets of foreign capital, suddenly looks a lot riskier. Blame it on Brexit.
“Brexit’s good for us, not for them,” said Anita Springate-Renaud, owner of Engel & Völkers’ brokerage in Toronto, who expects to field calls from clients seeking to redirect their investments. “We are a safe bet.”
If Springate-Renaud is right, there may be heightened demand from moneyed clients for homes and condos as well as office towers in two of Canada’s hottest real estate markets, which already have seen prices soar from an influx of foreign money. There’s a record US$443 billion in global capital allocated to commercial property that wealthy investors haven’t deployed, according to figures from Cushman & Wakefield Inc.
Brian Kriter, an executive managing director of valuation and advisory at Cushman & Wakefield, has met with one Asian commercial real estate lender who decided to freeze plans for a multimillion-dollar financing deal in London and is considering channeling that money to North America instead. Cushman & Wakefield is organizing a client day in July, potentially in New York, to discuss the early implications of Brexit’s fallout.
In the last decade, central London saw the biggest increase in residential property prices of any major city as the favored destination for global capital seeking a stable sanctuary. Nearly three out of every four newly-built homes in 2013 were bought by foreign buyers, half of them from Asia, according to Knight Frank LLP. Similarly on the commercial side, 70 per cent of central London purchases were by foreigners in 2015.
With China among Asia’s most vulnerable economies to Brexit risk, there could be an even greater appetite from mainland buyers for North American assets, such as Anbang Insurance Group Co., which has snapped up multimillion-dollar assets in New York, Toronto and Vancouver.
Read more from the original Financial Post article in the Vancouver Sun, here.