Property Shares Targeted After EU Referendum

Since the vote to leave the European Union, UK property shares have been hit hard, and hedge funds have been joining in on the action by taking out large short positions on them. Companies such as Great Portland Estates and Derwent London have some of the best development pipelines in Central London, however since Brexit this has had a negative impact and their share prices have fallen by as much as 30%.

One of Europe’s largest hedge funds, Marshall Wace, took a short position on Great Portland Estates (GPE) of 0.7%. GPE now has 3.1% of its stock on loan. Growing concerns about the general global market, in addition to more locally London’s falling residential and office values, are putting even more pressure on property companies within the UK and London. Estate agent Foxtons shares on loan have increased to 4.4%, similarly Countrywide’s shares on loan have increased to 3.1%.

The most shorted company is property developer; Intu Properties PLC whose main focus is on retail – has almost doubled the percentage of shares out on loan (sold short) since before Brexit. 

Barratt Homes has also been hit hard with a fall in share price of over 25% and has begun to reassess their £1 billion per annum budget for purchasing land. Barratt Homes has stated it’s too early to tell the impact of Brexit, but remain positive the mortgage market will continue to provide easily available, attractive mortgage finance and there will be an under-supplied housing market; both fundamentals to the buoyancy of the housing market.

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.