FINANCE: Hermes Real Estate would not invest in Scottish property if the country stopped using sterling as its currency, chief executive Chris Taylor said this week.
“I would sooner invest in France that Scotland. There is a risk of Scotland leaving sterling, and if it does so, it would become a peripheral country for us in terms of how we invest our capital. The population is only 5m,” he said.
Taylor was speaking at a Hermes-hosted breakfast briefing at the BP Tower on domestic institutional investment into property.
The company is “circumspect” about European real estate, but bullish on the UK. However, Taylor said the UK market was “starting to look very expensive” and that there were “signs of a bubble”.
He gave the example of in Kent, in which it owns a 7.5% stake, as an example of an asset that was “mispriced”. He said Hermes did not intend to bid for Lend Lease’s £550m 30% stake, for which bids were called this week.
“We have heard that the yield would be around 4%, which we believe is mispriced. We are not a forced buyer, and we are not under pressure to buy at those kinds of yields,” he said.
sophia.furber@estatesgazette.com
