MIPIM UK NEWS: The UK needs to “accept hard Brexit and get on with it”, Guy Hands said in his keynote speech at MIPIM UK this morning.
The chairman and chief investment officer of Terra Firma said that “sometimes reality is tough” but added that a hard Brexit could be an opportunity to make the country more business friendly.
Hands, a Remain supporter, stressed that because connectivity has allowed businesses to go anywhere in the world, the EU would not necessarily benefit if London were to lose its place as a financial centre. Rather, it would “harm Europe immeasurably”.
He said: “If financial services move out of London, they will move out of Europe. There is not a need to be in one specific place, except for what that one place gives you culturally. And there is no way Paris or Frankfurt will replace London in my lifetime or my children’s lifetime.”
However, he warned that if the government replaced “the red tape of Brussels” with its own stringent regulations, the UK would have all of the disadvantages of the EU without the benefits of the single market.
He said: “A lot of the people who vote for Brexit want reduced regulation, reduced taxes and increased opportunities for business. It is not the referendum that matters, it is what happens now.”
Regardless of the future of the UK, Hands was optimistic about the success of its property market and said the industry has to take a very long-term view on opportunities.
He said that although no one knows exactly what will happen in ongoing Brexit negotiations, it would not change certain factors that drive the property industry, including a growing population and a “chronic” housing shortage.
Since getting involved in the industry in the 1980s, he added, house prices had twice plummeted by 20% in a single year and had also risen by 20% just as quickly. A short-term view could not have taken advantage of those cycles.
Hands said: “Keep a long-term perspective. There will be ups and downs, but you will come out the other side no matter what that looks like.”