Landsec CFO Martin Greenslade is the latest to criticise the government for its dealings over Brexit.
Landsec chief financial officer Martin Greenslade has lambasted the government for dragging its feet over Brexit. His concerns come as the property sector rallies together in a bid to persuade Whitehall to bring an end to the uncertainty plaguing the business sector.
Speaking exclusively to EG on the sidelines of industry event the Bloomberg Intelligence and EPRA 2019 Real Estate Summit: Challenging Change, held at Bloomberg’s London headquarters last week, Greenslade said the government needed to make a decision “as soon as possible” over the UK’s departure from the EU to encourage more investors to spend in the UK and to boost consumer confidence.
“The worst thing for any economy is uncertainty, as it impacts on investment,” Greenslade said. “This uncertainty needs to be removed in the appropriate way: to me that means coming to a decision either way, whatever the decision.”
Greenslade said removing political uncertainty was “absolutely critical” to persuade nervous investors to continue pouring capital into the UK.
“It’s quite hard at the moment for people outside of the UK looking to invest in shares to get past the [political] risk before they even look at other UK-specific risk factors,” he said. “Removing uncertainty is absolutely critical.”
Consumer downturn?
Consumers also need to feel more secure about the country’s prospects so they do not hold back from spending, Greenslade added.
“From a retail perspective, it is important that consumers feel certain about the outlook for the country.
“The last thing we need is a consumer downturn, and from a UK plc perspective, the UK needs to be an investable proposition.”
Commenting on the struggling retail sector, Greenslade said there were “key concerns” around the appetite for new retail developments and the value retailers place on flagship shopping destinations.
“The health of the retailer is important to us,” he said. “Retailers have had pressures coming at them from all sides and clearly retailers who are struggling make it harder for us, as well, to deliver great experiences and to grow rents.”
Just under a quarter of Landsec’s assets are in shopping centres and retail parks, according to Greenslade. However, he said the company had reduced its exposure to this sector, cutting the amount of shopping centres outside of London from 26 to six.
Greenslade explained that there was always the chance the company could cut its exposure to retail further. “We ask ourselves all the time: did we sell enough?” he said.
Although Landsec will “always be selling and churning the portfolio”, Greenslade said the company had put its balance sheet “in a place where we don’t need to make any disposals at all”.
Wider sector concerns
Greenslade’s comments on Brexit follow Countrywide’s warnings last month that it was expecting to experience a further slowdown in residential and commercial property transactions. The property agency blamed Brexit for affecting confidence and weakening the market.
Executive chairman Peter Long said Countrywide’s 2019 H1 EBITDA could take a hit of £3m-£5m as a result.
Research conducted by the British Property Federation and Grovesnor Britain & Ireland in January this year showed the number of major property firms planning to increase development in 2019 has dropped by 34% in the face of short-term Brexit fears.
In a poll of the UK’s largest investors, owners, developers and advisers, 41% of firms aimed to increase development activity during this year. This compares with 62% in 2018.
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