Uncertainty created by the vote to leave the EU will damage business confidence and hit London’s commercial property market, Great Portland Estates has warned. In a trading update, Great Portland said it expected Brexit to reduce economic growth in London, where it has all its £3.7bn of property investments.

That will have a knock-on effect on confidence, investment, and rental values. Toby Courtauld, Great Portland’s chief executive, said: “In the near term, we expect confidence to reduce and some business investment decisions to be deferred whilst negotiations to establish our trading arrangements with the EU are undertaken. As a result, we can expect London’s commercial property markets to weaken during this period of uncertainty.


The company published its warning amid growing concerns about a commercial property if the UK economy contracts following last month’s vote to leave the EU. This week, six property funds worth a total of £14bn have blocked worried investors from withdrawing their money.

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Courtauld said Great Portland was in a strong position to weather the tougher market and had the financial strength to snap up bargains. From the end of the three months to the end of June, 62% of its developments were already sold or let, and 97% of its leasehold property was occupied. Great Portland develops and invests in offices, retail space, and housing in the West End and other parts of central London. Its properties include the ITN building on Gray’s Inn Road, upmarket Piccadilly, Jermyn Street, and Bond Street, and a large retail site at the east end of Oxford Street, which is undergoing regeneration as part of the Crossrail project.

Standard Life drew attention to fears among retail investors in the commercial property when it closed its £2.9bn funds on Monday. Others followed suit, including Prudential and Aviva, in a move to prevent forced sales of assets as people tried to get their money out.

Commercial property prices rose 40% from 2009 until the start of this year, drawing in retail investors seeking better returns than the meager rates on offer from bonds and bank accounts. After the vote for Brexit, the funds were bombarded by redemption requests because of fears that slower economic growth would slash the value of retail parks, offices, and other investments held by the funds. Great Portland shares, which had lost a quarter of their value following the vote to leave the EU on 23 June, rose 4%.