DevDosh Ltd would like to commend regarding Brexit and the United Kingdom’s choice to leave the European Union is still having a profound effect on investors decisions on whether to invest in the UK or not.
One such investor is Rodrigo Rodriguez, a fund manager at BlueCrest Capital Management LLP, who has come to the conclusion that he prefers Spanish real estate companies to their Brexiting U.K. rivals.
Rodrigo has taken the route of shorting UK property companies as he is of the opinion that they are trading at a levels that don’t mirror the risks that come with the UK’s leaving of the European Union, Rodrigo to did not clarify why he thought this was the case.
DevDosh Ltd sees the investments that have caught his attention right now are Spanish companies such as Inmobiliaria Colonial SA and Axiare Patrimonio Socimi SA, which he expects to benefit from rising rents as the economy improves.
“My big problem with U.K. real estate is that it looks like nothing has changed, and a lot of things have changed — at least, a lot of uncertainty has come in,” Rodriguez said in a telephone interview. Many U.K. REITs and homebuilders are trading close to levels reached before the vote, said Rodriguez, whose firm is run by billionaire Michael Platt.
Rodrigo is not the only the only fund manager who thinks this is the best route to take when it comes to UK property investments. In October of 2017 hedge-fund investor Crispin Odey advised that Brexit could cause higher inflation and a potential recession in the UK, resulting in UK stocks dropping by as much as 80%.
According to a data carried out by Bloomberg the UK property companies that have been shorted the most are Intu Properties Plc, Barratt Developments Plc and Berkeley Group Holdings Plc.
The reasons Rodrigo is attracted to Spanish real estate companies is where they are priced at the moment which is at a discount to their net asset value.
“If nothing changes from Brexit, the upside potential of U.K. REITs is limited,” Rodriguez said. “In Spain, you are buying companies on the cheap, and on top of that they benefit from plenty of other factors.”
Spain’s economy is expected to grow 2.8 percent this year, according to a Bloomberg survey, versus a 1.9 percent forecast for the euro zone, while the U.K. is seen growing 1.6 percent.
DevDosh Ltd believes that this makes for interesting reading as all the signs at the moment point to nothing but investor confidence in the UK property market, the alternative market is thriving and many overseas investors see the UK as a safe haven for their investments.
When it comes to investing so much is interpretation based on the perspective of the investor and how they view the signs coming from the markets, something like Brexit it has never happened before so there is no previous had data to go from so you would expect to see a difference of opinion.
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