Two in five (40%) institutional investors plan to increase their investment allocation to European commercial real estate in the next 12 months despite the uncertainty caused by Brexit, according to BrickVest.
The real estate investment platform’s study highlights that three in five (60%) institutional investors believe Brexit uncertainty will be the biggest challenge facing European investors in commercial real estate over the next year.
Nearly half (46%) thought political uncertainty would be the biggest challenge while nearly two in five (37%) suggested it would be low economic growth. Rising interest rates were highlighted by 31% of respondents while 25% felt it would be inflation. A fifth (22%) cited increased regulation as the biggest challenge for investors in the next 12 months.
Despite these challenges, BrickVest’s research highlighted that Brexit could also present some European commercial real estate investment opportunities.
Two fifths (39%) of institutional investors felt that Brexit would increase the number of investment opportunities in European commercial property. Just 22% felt the number of opportunities would decrease.
BrickVest chief executive Emmanuel Lumineau said commercial property has seen increased inflows from institutions for a number of years as the asset class has become more and more mainstream.
“Clearly Brexit has created some uncertainties and will certainly present challenges for institutional real estate investors, however our research shows that European investors believe investment opportunities could increase,” he added.
“Since the vote in June last year, we’ve seen a huge increase in the number of investors joining the platform. We are experiencing strong levels of demand from investors for property as an asset class and it is clear that many of our users want to take advantage of the vote.”
