UK still most attractive commercial real estate market for global investors despite Brexit
Despite concerns over Brexit the UK was rated as the most attractive commercial real estate market among investors in the first quarter of 2017, new research shows.
Some 30% of investors selected the UK as their preferred location, down slightly from the 31% recorded a year ago, but well above the 25% favouring Germany and 18% the United States and France.
Those favouring Germany are unchanged year on year while for the US there has been a drop of 21% and France was down by 14% compared with the first quarter of 2016, the latest Brick Vest commercial property investment barometer also shows.
However, the research found that both German and French investors are less favourable toward the UK since March last year. Less than one in five, 19%, of French and the same number of German investors suggested they prefer the UK in March this year compared to 24% and 22% respectively last year. US investor sentiment towards the UK fell marginally from 23% to 22%.
Despite Brexit and the potential of a second Scottish referendum being called in the next few years, some 46% of BrickVest’s UK commercial real estate investors selected their home market as their preferred location, up from 44% in March 2016.
UK investors suggested Germany was second, backed by 19%, the US third with 16% and France with 14% in fourth in terms of preferred locations to invest.
According to BrickVest’s investors, average risk appetite index amongst its US investors remains growth oriented and relatively unchanged in the last 12 months at 56 compared ith 58 in 2016. UK investor risk appetite also remained largely the same at 55 compared to 54 in 2016, despite choosing to leave the European Union. This indicates that investors’ risk appetite is fairly balanced albeit slightly leaning towards the riskier spectrum.
BrickVest’s barometer also showed that the investment objective for the majority, 48%, of its online investors is capital growth compared to 37% which said income.
‘Despite Brexit, our latest barometer shows the UK remains the preferred location to invest in from our global investor base but uncertainty created is beginning to take effect. Since the vote in June, we’ve seen a 72% increase in the number of investors joining the platform,’ said Emmanuel Lumineau, BrickVest chief executive officer.
‘We have seen plenty of appetite from investors for property as an asset class and it is clear that many of our users want to take advantage of the vote,’ Lumineau added.
