April 18, 2017
The UK remains the preferred region to invest in commercial real estate despite seeing a slight dip in popularity since Brexit, according to the latest BrickVest commercial property investment barometer. In March 2017 nearly one in three (30 percent) selected the UK as their preferred commercial real estate investment location, down slightly from 31 percent in March 2016. BrickVest’s quarterly survey of 3,000 investors found that a quarter (25 percent) of respondents favour Germany as their second location of choice for commercial real estate opportunities, the same as last year. Less than one in five (18 percent) selected the US which represents a fall from 21 percent last year. The same number (18 percent) also selected France although this is an increase from 14 percent in 2016.
The Barometer claims that both German and French investors are less favourable toward the UK since March last year, however. Less than one in five (19 percent) French and the same number of German investors suggested they prefer the UK in March this year compared to 24 percent and 22 percent respectively last year. US investor sentiment towards the UK fell marginally from 23 percent to 22 percent.
Despite Brexit and the potential of a second Scottish referendum being called in the next few years, nearly half (46 percent) of BrickVest’s UK commercial real estate investors selected their home market as their preferred location, up from 44 percent In March 2016. BrickVest’s UK investors suggested Germany was second (19 percent), the US (16 percent) third and France (14 percent) 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 (58 in 2016),. UK investor risk appetite also remained largely the same at 55 (54 in 2016) despite choosing to leave the EU. 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 percent) of its online investors is capital growth compared to 37 percent which said income.
Emmanuel Lumineau, CEO at BrickVest, commented: “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 percent increase in the number of investors joining the platform. 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.”
Image: TSK Group