Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (June 8): Britain's exit (Brexit) from the European Union (EU) will hurt major Malaysian real estate investments in the United Kingdom (UK) as the British pound would be hammered by Brexit. 

Allianz SE chief economist Michael Heise said today a Brexit will result in a significant drop in the value of the British pound.

"Some say a 20% drop in the pound is possible," he said during a briefing on perspectives of the world economy and Asia.

"But we could see a substantial 10% drop, maybe 15% to 20% which would hurt the real estate market in London," he added.

Allianz SE foresees a 30% to 40% risk that Brexit will occur, according to consensus.

Heise also said Brexit is not likely to trigger other countries from leaving the EU.

"If any countries were to leave, it would be the major economies like Germany that is contributing most to the EU," he said.

"But I don't think Germany is looking to leave the EU. They are trying to keep the EU together," he added.

 

A report from Knight Frank in November last year found that Malaysia has been the third largest Asian investor into the UK and Australian property markets in 2014 and 2015.

Malaysia follows Singapore in first place, and China at second.

Malaysia’s investments accounted for US$5.61 billion, while Singaporean investments were worth US$25.10 billion and China’s US$22.09 billion.

One major Malaysian project in the UK is the Battersea Power Station redevelopment project.

The project involves the redevelopment of 15.78ha of the Battersea Power Station in London by the consortium comprising SP Setia, Sime  Darby Bhd and the Employees Provident Fund.

      Print
      Text Size
      Share