From Trump to terrorism and cyber threats to climate change, the world is packed full of risks and potential spanners ready to seriously mess up the works
Donald Trump
There are no two ways about it, the Republican presidential candidate is somebody the industry needs to be worried about.
The US has consistently been one of the most reliable international investors in UK property. But in his run for the White House, Trump has been hostile towards free trade and labelled China as a “currency manipulator”.
He has advocated a number of regulatory measures, from slapping tariffs on imports from China to the government repaying only some of its debt in an economic crisis.
In the event of a Republican victory, his policies could even escalate into a trade war and break up the trans-Pacific partnership between the US and 11 other American and Asian states which was signed in February 2016, according to the Economic Intelligence Unit.
Miles Gibson, CBRE’s head of UK research, says more than Trump himself, the real threat is what he represents: “Insularity – a catch-all phrase for protectionism, for being less open to the world, less cosmopolitan, less diverse, biting the hand that feeds us.”
He adds: “Global cities are by definition not insular, so if we turn in on ourselves, the chances of us being successful in the future are lower.”
How to protect yourself/your investment Bilateral investment treaties exist between many countries, protecting investors from a wide range of government actions and interference. An EU-US trade and investor mega deal is being negotiated. However, it is facing fierce opposition from some member states, activists and environmental organisations, sparking doubts about whether it will be passed.
Political risk insurance is an alternative solution. It protects foreign investors against risks associated with a host government, including discriminatory regulations against an investor or project, creeping expropriation, or breach of contract.
Insurance can also be obtained for country-level risks that apply to all investors in that country or sector, including war, revolution, mass nationalisations, regulatory changes and currency inconvertibility, according to Ian Roberts, partner at Clyde & Co law firm.
• Click here to read the full article on EG’s Global Real Estate Insight website.
