Jim Armitage: When property funds get busy, you know an exodus looms
The smart money is beginning to move. Schroders’ property funds are bidding for a chunk of Frankfurt’s office space, Standard Life and CBRE’s are looking to buy in Dublin and Amsterdam. Luxembourg is seeing a rush of interest.
To suggest City financiers will decamp en masse to euroland ahead of Brexit is palpable nonsense. But so is the head-in-the-sand view that none will.
Property speculators know this and want to capture some of the increase in valuations that will arise.
Major employers in the City and Canary Wharf may not say it in the open, but most are making contingency plans to move some staff to the Continent before we lose EU passporting rights.
Given that the red tape of opening abroad is a two-year process, they’d be mad not to.
They’re weighing the pros and cons of location, location, location. Dublin — language and cultural ties versus small-town life on an island in the Atlantic; Luxembourg — higher taxes, pricy properties but good Continental connections; Frankfurt — a finance culture but boring, expensive and German.
The only positive about any of this for London is that none of the above cities are pitching for banks to move lock, stock and barrel. Europe’s regulators couldn’t cope.
Instead, they talk of forming partnerships and satellites with London. A mini-exodus — counted in the thousands, not the hundreds of thousands — is in the wind. It would be naive to think it isn’t.
