UK real estate landmark case
A court case will be heard this week involving the European Medicines Agency – the EMA – on one side and Canary Wharf Group on the other.
Basically, the EMA signed a 25 year lease on 10 floors of office space back in 2011, but is arguing now that BECAUSE it is having to relocate due to Brexit it should be able to exit its contract.
Canary Wharf Group is saying that Brexit was always a possibility given the existence of Article 50 and that the EMA should honour the remaining duration of its contract.
The outcome of this case could have MASSIVE repercussions on not only real estate in this country, but could also be used as precedent for any big company with sizeable European operations to use as an excuse to cut contracts short.
Given the global economic slowdown at the moment, you can imagine that there will be a lot of companies out there who would jump at the chance of exiting contracts early if they can.
India’s growing car market
The second thing I wanted to talk about today was India’s growing car market as it has now overtaken Germany to the world’s fourth largest car market.
It’s actually growing SO fast that some predict that it will be bigger than Japan’s market by 2021.
Car density – which is a measure of how many cars are owned per 1,000 population – is very low currently with only 27 per thousand versus 145 per thousand in China and 570 per thousand in Germany. This would imply that the market potential is enormous.
However, the problem is that average car prices in India are beyond the vast majority of the population so it will take quite some time before the major car makers can benefit.
One company that SHOULD continue to benefit, though, is Suzuki because it started a joint venture with the Indian government in 1982 called Maruti Suzuki which now has 54% market share. It has grown to such an extent that it is now bigger than parent company Suzuki Motor itself!