Online real estate investment platform BrickVest has highlighted a rise in UK investor risk appetite despite the UK’s impending departure from the EU.
According to its latest commercial property investment barometer, the UK remains the preferred destination for 31% of the 300 real estate investors surveyed. Despite Brexit and its implications for investment, 43% of UK investors surveyed selected their home market as their first preference.
The pan-European property platform meanwhile found that 24% of investors favour Germany for real estate opportunities; however, this is a fall from 28% in June 2016. Additionally, 21% selected the US, a proportion unchanged since June 2016, while 15% named France their premier destination, up from 13% in the previous year.
Furthermore, figures for Europe and North America revealed similar sentiments toward UK real estate: 24% of French, 19% of German and 23% of US investors indicated their preference for the UK market, up from 22%, 18%, and 20% respectively in June of 2016. The average risk appetite index for commercial real estate, as calculated by BrickVest’s barometer, suggests an increase to 49% from 47% last year, indicating a “shift from low to balanced risk”, according to the survey, with UK-based investor risk appetite similarly increasing from 49% to 51% despite Brexit uncertainty.
“Despite a series of significant events over the past 12 months including Brexit, our latest Barometer shows the UK remains the preferred location to invest in from our global investor base,” says BrickVest CEO Emmanuel Lumineau. “Since the vote in June last year, we’ve seen a 72% increase in the number of investors joining the platform and are seeing plenty of appetite from investors for property as an asset class.”
The BrickVest barometer backs up the findings of a recent survey by KPMG. The accounting firm’s report on real estate investment in the UK revealed striking polarisation among investors. Some 46% of responders committed to investment in the UK after Brexit, whereas 44% planned to slow down investing. Significantly, 10% anticipated a freeze on UK investment altogether. “The survey demonstrates the continuing strength of the appetite among global real estate investors for opportunities in the UK real estate market, despite ongoing economic and political uncertainty,” says Ronan Vaspart, a director at global property conference MIPIM.
Although its claims are “by no means conclusive”, the KPMG survey offers possible explanations for varying attitudes among investors. It suggests that the discourse within the market is largely inspired by sentiment, indicative of whether investors regard Brexit as an opportunity or as a threat. Despite the divergence however, the survey notes: “Many responders argue London will retain its preeminent status as a global financial centre, regardless of whether the UK is in or out of the EU.” The survey posits that what makes London attractive to investors, among related factors, is “a history of adapting to global change”.