Fletcher King expects ‘positive’ impact after Conservative election victory

Fletcher King expects that the Conservative majority win at the General Election will mean tenants and investors in the commercial property market are more positive in their decision-making. The commercial property market has been “severely” impacted by Brexit and the UK political environment, with investment in commercial property at a five-year low during the six months to the end of October, the company’s chairman, David Fletcher, said in the firm’s half-year results. He added that “the situation was graphically illustrated by M&G suspending redemptions in its £2.5bn property fund due to an inability to sell enough property to satisfy investor withdrawals”. However, despite business being “slow” over the period, Fletcher King has remained in profit, albeit at a lower level than in the previous year, due to its asset management and valuation business. The firm recorded a pretax profit of £108,000, an 18% fall on the same six months in 2018, while its revenue fell from £1.5m to £1.3m. The business expects its asset management arm to continue to provide a steady income flow, and it has some investment sales instructions that should happen before the end of the year. In addition, the firm is expecting a reasonable flow of valuation instructions, so long as the banks continue to lend. However, Fletcher warned that “although the political climate is now clearer, it remains hard to predict the final outcome for the rest of the year, and our previously stated views on the difficulty in maintaining profitability remain”. He added that difficult negotiations remained ahead with the European Union, and that the exact terms of the UK’s withdrawal from the EU could still have an impact on decisions. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette