Brexit impacts on the future of workspaces

Thursday 28 November 2019

Uncertain about uncertainty?

The UK has narrowly avoided a recession by the skin of its teeth. Many sectors have been affected, along with their terms of trade, but avoiding a recession does not necessarily mean we won’t be dipping into it after Brexit. Now we’ll see whether the UK could slip into a recession or actually grow out of it, which are two separate projections. The transition period is draining the general confidence. Will the future be as the PM says it will be, what about the EU stance and what people on the remain/leave and the inbetweeners actually think is important to them? This level of uncertainty swerves up and down with what the politicians blurt out to try to secure popular opinion.



Deal, No Deal, Delay

There are a number of factors that promote uncertainty. We have 3 scenarios (deal, no deal, delay) - but the government is already advising on a no-deal Brexit, that is a worst case scenario, meaning people would naturally be prepared for a better outcome, if the UK were to get one.

Some factors add seasoning to the uncertainty such as question marks relating to national plans – country before anything, people’s referendum before anything may not equate to nationalism, but it may be ignoring important economic and social matters. Is country before party even real and can our politicians’ motives be trusted? This depends on the outcomes being pursued and what is the strategy to execute from the UK side and one that actually the EU can take, even whilst holding its nose.

Certain rational and irrational fears are daily news. Huge queues at airports, no food in the supermarkets, massive economic hardship – these are all fears that people have. The transition period lasts for about 3 years if played by the EU rules, but in the meantime would it be good for the UK to unnecessarily worry about what might happen in the future or rather tread the Brexit path by being resilient to challenges, open to opportunities, kind to our neighbours and other international blocs and also relentless in moving the country forward in terms of digital, infrastructure, AI, Fintech and also IoT, along with other traditional and growing sectors such as real estate.


Brexit factors affecting buoyancy in commercial property:

1. Changes in plans local to UK industries – such as freedom of work, any EU schemes such as research grants for SMEs, any benefit of reaching a wide neighbouring market in one swing.

2. Property development – plans called off, stopped building halfway, or delayed the final constructions and launch in anticipation of demand. According to the FT, Landsec defies Brexit uncertainty with big development push with the UK property company having 4 London schemes totalling 1m sq ft of buildings, again shows that there is anticipation of demand after the Brexit transitions end.

3. Does Brexit give small businesses flexibility and more independence? Does having a base in the UK improve the international stance? Does being situated in certain big cities, including London matter?

4. What sectors are booming? According to IbisWorld, the top ones are app dev, electricity and telecoms, infrastructure services and also serviced offices make the top 5. At the moment, the leading and most disruptive sector seems to be Fintech, as outside the Silicon Valley Fintech is big in the UK and inside Europe (according to the full documentary, 11:Years – The Rise of UK Fintech from 11:FS), and it will still be a growth sector when the UK is outside the EU.

5. Other factors: Logistics, freedom of movement of people, access to a bigger immediate economy/markets, UK or EU framework and lastly implementation of UK economic frameworks which supersede EU frameworks.

6. If we are talking about business, it is also about the ease of doing business, UK currently ranks 8th globally, one place up from 2018.

In this video covered on The Guardian, the current PM, Boris Johnson uses the F1 super car analogy and also that the UK economy is firing half its cylinders. If we use the analogy of taking a curve vs jumping off a cliff, for the former, we’ve got to slow down, or have the right technique ready to slow down naturally and stabilise after the curve. Preparation is key, and the country’s KPIs will naturally take a hit. Who can make a curve without hitting the brakes or using swerve techniques to slow down! Rule is, you will have to slow down, or you will be slowed down before you can accelerate. That doesn't mean you are worth less, it just means to have to prepare properly, accept the reality of the curve and do it, you will 1000s of reasons not to do it and even more that will convince you that there are other options which are less scary. Fact is, it is scary for some and for most it is a bit uneasy, but reality is that one will get past the curve with at least some turbulence - brace yourselves, Brexit is nigh.


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