"Global commercial real estate transaction volumes have fallen over the past few months as a result of capital market volatility, concerns about rising interest rates and low oil prices," Moody's analyst Griselda Bisono stated on Tuesday. "And the Brexit vote is likely to drive additional declines from leasing and sales in the United Kingdom for the foreseeable future."
Moody’s explained that offices in London are especially at risk because they will be most impacted by the negative employment and job growth expected after the Brexit.
Both owners and occupiers of UK commercial real estate are expected to be negatively impacted.
The multi-year nature of commercial real estate contracts should keep long-term revenues relatively stable, according to the release.
Last month, Moody’s said the Brexit decision would lead to a prolonged period of uncertainty that will ultimately be credit negative for the United Kingdom.
