Fresh Brexit fears send Yorkshire developer share prices plummeting
SEVERAL major Yorkshire property companies have been feeling the effects of the Brexit decision after a delayed reaction.
The stock markets went into freefall following the announcement on 24 June that 52% of those that voted wished for the UK to leave the European Union.
The value of Yorkshire’s largest companies fell by £3.8bn in the immediate aftermath , but there has been a concerning trend that suggests the true impact of the decision has not yet been revealed. This morning the pound saw a 31-year low against the US dollar as fresh fears over Brexit filter through.
Housebuilder Persimmon initially lost £1.7bn of its value after its share price dropped 26% the day after the vote.
Since then, a slight rise in the fortunes of developers including Persimmon have been offset by another week of turbulence and decline.
Last week’s high of 1,520p per share for Persimmon was erased after its price dropped to 1,320p yesterday. The FTSE100 firm had been on track for another “outstanding” year after increasing profits by a third in 2015 , with plans to pay back £2bn to shareholders by 2020.
Developer Hammerson, the firm behind the £165m Leeds Victoria Gate development (which is nearing completion) and the £480m Sheffield Retail Quarter, has seen a similar pattern.
From 513p per share on 24 June, Hammerson’s share price rose again last week to 538p, before plummeting to a new low of 496p yesterday.
Performance of commercial property and construction stocks since June 1, indexed to the close on June 23, the day of the EU vote
In week following the Brexit decision, the share price of Land Securities, owners of Trinity Leeds and the White Rose Centre , plateaued at 1,039p per share before dropping again to 944p. This was not as low as the Monday following the decision, when it dropped to 910p.
Henry Boot, which had been trading “comfortably”, saw a share price drop to a lesser extent than its fellow developers.
However since the Brexit decision, it has been unable to raise it’s head above the 200p per share mark, with highs of 198p last week, dropping to 178.5p yesterday.
MJ Gleeson, which reported earlier this year that profits had skyrocketed 190% , is the only developer that seems to be bucking the two-week trend, and even the Sheffield-based regeneration business suffered a major decline in share price initially.
The business has seen a steady incline from the low of 396.5p the Monday following the Brexit vote, but it has still not been able to return to pre-referendum levels, reaching an 11-day high yesterday with 475p per share.
It was announced this morning that major property investors including M&G and Aviva Investors had joined Standard Life Investments in suspending their property funds after a “higher than usual” number of requests to sell units and in the wake of a challenging marketplace in the UK.
