The UK commercial property market has dropped in popularity among both international and domestic investors, according to BrickVest’s latest commercial property investment barometer (‘the Barometer’)* .
Data capturing sentiment from over 6,000 international professional real estate investors shows that less than a third (29%) view the UK as their preferred market. Support among UK-based investors for their home market dropped to 40%, its lowest level since the Barometer started in Q1 2017.
Germany has emerged as the biggest beneficiary of the UK’s declining popularity among international investors, recording its highest ever score (26%). Among UK investors France achieved a new record high approval score of 16% during the first quarter.
The latest Barometer reveals that over the last three months overall appetite for high risk commercial property strategies (e.g. opportunistic and development) has fallen to its lowest ever level of 18% in favour of moderate strategies (e.g. value-add, light refurbishment), which has climbed to a new high of 57%, up 12% year-on-year.
In terms of asset type, support for primary assets in tier one cities grew over Q1 among both international and UK investors to 61% and 63% respectively at the expense of secondary cities and regional markets (39% and 37%), reflecting a flight to safety.
Emmanuel Lumineau, CEO at BrickVest, commented: “Brexit uncertainty continues to take its toll on the UK commercial property market among both international and domestic investors. With no immediate political solution likely, there is every possibility that investor confidence in the UK will continue to slide in the months to come. While not without their own challenges, both France and especially Germany grew in popularity over the preceding quarter."
“Our Barometer lays bare the fall in sentiment among investors towards higher risk opportunities as fears of an economic slowdown and an inevitable downwards turn in the cycle gain momentum.”
The full report is available at: http://brickvest.com/barometers
* Sample of 6,000 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).