London remains the top destination to invest in commercial real estate, despite Britain’s decision to leave the European Union, coming in ahead of Paris, Berlin and Munich.
38 percent of institutional real estate investors cited London as the top European city to invest in commercial real estate, ahead of Berlin at 36%, Munich at 31% and Paris at 22%. The figures, released by real estate platform BrickVest, suggest fears that Britain may be unattractive to investors in the wake of the European Referendum result may be exaggerated.
According to BrickVest, three in ten institutional investors believe Brexit will either increase or significantly increase European commercial real estate investment opportunities. A further one in four institutional investors believe that Brexit will have no impact on commercial real estate investment opportunities.
Emmanuel Lumineau, CEO at BrickVest, commented: “Our research has identified London as the number one European city to invest in commercial real estate as investors seek to capitalise on potential price discounts and market uncertainty. However Germany dominates across the leaderboard and we have seen plenty of appetite from investors looking to capitalise on income producing portfolios across Europe and take advantage of the Brexit vote.
Four of the top ten European cities named in the research were German, highlighting a clear positive trend towards German commercial real estate.
Immediately after the referendum result in June investment into UK commercial property dropped to lowest level in two years, causing prices for British real estate began to fall. However, BrickVest’s research suggests this may be shortlived.
“Like any trading market out there, you need a critical mass but you also need standardisation, automisation and trust, as well as institutional quality to make it happen which we believe is lacking in our real estate industry,” Lumineau added.