[Barometer Q3 2017] Investors favour Germany over UK for commercial real estate for first time
Research | November 8, 2017
One in three (33%) commercial real estate investors have suggested that Germany is their preferred region to invest in, according to the latest BrickVest commercial property investment barometer (‘the Barometer’)1. This is the first time that Germany has been chosen as the number one region to invest in and ahead of the UK which was selected by a quarter (27%).
- 33% of investors favour Germany, according to the latest BrickVest commercial property investment barometer
- 27% favoured UK, 17% the US and 15% France
- UK, French, German and US investors are now less favourable towards the UK
- Average investor risk appetite for commercial property increased to 52% from 48% last year
The UK saw a drop from 33% to 31% in the last quarter and from 32% in the same Barometer 12 months ago. Nearly one in five (17%) selected the US, which represents a slight increase from 12 months ago (16%), while France was selected by 15%, the same as Q3 last year.
The Barometer also revealed that UK, French, German and US investors are now less favourable towards the UK since last year. 45% of UK, nearly a quarter (21%) of US, a fifth (19%) of French and 18% of German investors suggested they favour the UK this quarter, representing a decrease from last year across the board from 46%, 26%, 28% and 21% respectively.
According to BrickVest’s investors, the average risk appetite for commercial real estate continues to rise to 52% from 49% last quarter and from 48% this time last year, meaning a sentiment shift from low to balanced risk. German investor risk appetite increased significantly from 50% last year to 62% while the US saw an increase to 54% (47% in Q3 2016). UK investor risk appetite also increased from 46% to 47%. However in France, average risk appetite decreased significantly from 62% to 45%.
BrickVest’s Barometer also showed that the investment objective for the majority (55%) of its online investors is capital growth compared to 33% who said income.
Emmanuel Lumineau, CEO at BrickVest, commented: “Our latest Barometer reveals that Germany has overtaken the UK as the location of choice to invest in commercial real estate. Investor risk appetite continues to rise as commercial real estate offers opportunities, especially in the form of debt like investments which offer good risk adjusted returns in a volatile market environment.”
Two years after its successful launch, BrickVest remains the only pan-European online real estate solution platform that allows its community of investors to invest directly and actively manage their investment in institutional grade commercial real estate investment opportunities. BrickVest also offers proptech and regtech corporate services to real estate developers.
The firm recently announced the final close of its second fundraising round with £7 million, representing one of the largest series A fundraise in the proptech sector. The lead investor was Berlin Hyp, the real estate finance provider to Germany’s largest banking group, the Savings Banks Finance Group.
1 Sample of 3,500 international BrickVest professional real estate investors polled online on a quarterly basis. Risk is calculated on a scale from 0 (low risk – income) to 100 (high risk – capital growth).