By Esha Vaish
Sept 20 (Reuters) - Three big property services firms aredropping Brexit uncertainty clauses from their valuation reportsfor most UK assets as market conditions steady after a sharpdrop immediately after Britain's vote to leave the EU.
The original Brexit clause, seen by Reuters, stated therewas a reduced probability that valuers' opinions of the worth ofa UK property would exactly coincide with the price itspotential sale fetched.
British property was among the sectors hardest hit by Brexitand at one point commercial property funds worth over 18 billionpounds were suspended amid high redemptions from investorsconcerned that property demand and prices would plummet.
Concerns have since eased with four of the seven closedfunds reopening and data from a closely-watched UK index showingthat commercial property values fell less sharply in August thanthe month before.
"We feel now there's enough certainty in most sectors for usto withdraw that clause from all our valuation reporting," saidRobert Gray, head of fund valuations at Knight Frank.
Jones Lang LaSalle and Savills said that for some subsectorswith greater uncertainty, they had retained reworded clausesthat reflected a less cautious tone.
"Savills considers the uncertainty clause is redundant formost markets. However, there is a lack of post-Brexit evidencein some sectors ... and we will reference this in our reports asnecessary," said Ian Malden, Savills' divisional head ofvaluation.
The sectors involve central London offices, development landand buildings, retail parks and large shopping centres.
A revised clause from JLL, seen by Reuters, said there wasstill a lack of comparable deals in such sectors and thereforevaluations reflected a "greater degree of judgment".
Andrew Renshaw, JLL's lead director for UK valuations andprofessional advisory, said the concerns were largely around thelarger asset sizes. He expected the revised clause to disappearcompletely during October as conditions become more transparent.
For less risky properties, JLL dropped clauses completelyfrom Sept. 19, following a meeting of top property valuers andfirms last Wednesday, Renshaw said.
Knight Frank said it valuations for risky properties wouldon average be 2-6 percent lower than pre-Brexit levels.
All valuers have dropped clauses for properties with longleases and steady incomes, often seen in sectors such as studentflats and care homes.
There are some concerns that such clauses may resurface onceBritain begins formal negotiations to exit the EU.
Gray said he did not envisage reintroducing the clause inthe short term, though altered market conditions could prompttheir return. (Reporting by Esha Vaish in Bengaluru; Editing by Tom Heneghan)
Savills (SVS)
