Business Monday

Impending Brexit realities affect UK, Europe, U.S. — and Miami

A Union Flag flies in front of ‘Big Ben’ at the Houses of Parliament in London. Britain’s government will begin the process of leaving the European Union on March 29.
A Union Flag flies in front of ‘Big Ben’ at the Houses of Parliament in London. Britain’s government will begin the process of leaving the European Union on March 29. AP

Earlier this month, I joined several colleagues from the Miami Association of Realtors to attend MIPIM (Le marché international des professionnels de l’immobilier), the world’s largest international convention of real estate professionals. Along with more than 23,000 attendees in the Palais des Festivals in Cannes, France, we explored a number of imperative political, technological and business topics impacting our global industry. But the dominant issue on everyone’s mind was the looming impact of Brexit; the surprising 2016 decision by the United Kingdom (UK) to leave the European Union (EU).

I wrote about the initial ramifications of the Brexit vote in this space last July, just weeks after the election. I predicted that the disunion would be difficult in the short term, but also presented unique opportunities for Miami real estate. Now that Brexit has become more of a political and economic reality for the UK, the EU, and the United States, I offer the following information, observations, and experiences from our time at MIPIM.


One couldn’t help but notice that traffic at the MIPIM London City exhibit was lighter this year, reflecting the general mood of England and the rest of the UK. As many economists and observers anticipated, the Brits themselves are being hit the hardest by Brexit-related uncertainty, with economic growth slowing there noticeably.

Inflation hit 2.3 percent in February; a large jump up from 1.8 percent in January, especially when the Bank of England (our equivalent of the Fed) was targeting 2 percent. The Bank now expects it will continue to rise, perhaps to 3 percent.

While the pound sterling tried to hang on to a value of U.S. $1.29 to $1.30 for the few months after the vote (June 2016, a drop from close to $1.44), it plunged to the U.S. $1.24 to $1.25 range in October, where it remains today.

Housing prices rose 6.2 percent for the year ending January 2017.

On the bright side, imports are up due to the dropping value of the pound. Also, the biggest contributors to the large monthly increase in the CPI rate in February were from transportation, (including fuel), recreation and food, and non-alcoholic drinks.

Many British people with whom I spoke were unhappy about the Brexit vote, and consider it a disruption to what is still a relatively newly unified Europe — especially at a point in history when that union is facing legitimate global threats. (As I write this, London is in the midst of a terror attack near the Parliament building, continuing a wave of terrorism in major European cities over the past few years.)


While the approaching loss of the UK is having a negative effect on the EU (as inflation creeps up and companies start to pull workers out of London), not all is doom and gloom with respect to Brexit. Most of my fellow MIPIM participants from the continent were actually pretty confident that global trade — with the UK included — would continue apace, and that London would remain as one of the world’s top financial centers. I also noticed that the Scandinavian countries, who are not members of the EU, were having a very successful convention, as were the various German and French cities that were exhibiting.

Nobody in Europe seems to be panicking over Brexit, and most of my colleagues in international real estate appear comfortable taking a “wait and see” approach.


In my July column about Brexit, I mentioned that “in uncertain situations, smart money seeks stability, safety — and value,” and this seemed to be the case at MIPIM. We met with a great many British investors and professionals at the Miami and National Association of Realtors exhibitions; the vast majority of them looking for safe places to put their (and their clients’) money. As one English investor considering Miami real estate said to me, “I could buy a $5 million condo and, even if it lost 50 percent of its value, at least it would not lose 100 percent. And I would always have a nice place to visit my investment!”

You might expect that Europeans, in the midst of some Brexit anxiety, would have similar concerns about an unpredictable and decidedly anti-global American president, but this was not the case at all. During the entire conference, I did not hear a single negative reference to our new administration, and in fact, most attendees seemed happy to have “a real estate guy” in the White House.

There was a constant buzz of interest and activity at our various MIPIM exhibits from Europeans, Asians and South Americans. The overall feeling about U.S. real estate (especially in the commercial sector) at MIPIM was optimism for growth, new construction, tax breaks, stimulus and investment.

We are still about two years away from Brexit being finalized, although the UK would like to shorten that timeline considerably. (And the EU might make them pay to separate so quickly.) Barring any major international incidents, I would expect the current economic trends to continue accordingly, with the UK grappling with future uncertainty, the EU and Europe patiently and cautiously plodding forward, and the United States’ own economic recovery enjoying a positive boost from escalating global real estate investment.

Master Broker Christopher Zoller is an agent with EWM Realty International, 305-329-7779, He is also the 2017 Chairman of the Board for the 42,000 member MIAMI Association for Realtors.

▪ This was written for Business Monday in the Miami Herald and reflects the view of the writer, not necessarily of the newspaper. The Master Brokers Forum is a regular contributor to this space.

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