Spain and Germany are both set to overtake the UK to become Europe’s most sought-after destinations for commercial overseas property investors, a recent report reveals.
A survey of 148 real estate investors, carried out by Knight Frank, found that 28.5 per cent of investors favoured Germany as their ideal investment destination in 2018, while 20 per cent plumped for Spain.
However, only 12 per cent of the investors’ surveyed identified London as their preferred market.
Perhaps surprisingly, it is not last year’s Brexit announcement that has been given as the main reason behind the drop in confidence in the UK market. While 16 per cent of those surveyed did say that political uncertainty surrounding Brexit had prompted them to look elsewhere, 66 per cent said high prices and a lack of stock were more of an issue.
“In this low yield environment, demand for commercial real estate assets shows little sign of abating,” said Chris Bell, managing director for Europe, at Knight Frank. “Indeed, investor sentiment suggests we could see transaction volumes in 2018 exceed the 220 billion euros recorded this year.”
‘It is also encouraging that European investors are divorcing politics from the underlying economic and market fundamentals, which remain good, when setting their strategies for 2018. In Spain, for example, investors recognise that uncertainty around Catalonia independence risks masking a resurgent Spanish economy, and growing demand for office and industrial space in particular,’ he added.
Indeed, some 58 per cent of investors stated that investor demand for commercial real estate across Europe would be stronger in 2018 than in 2017.
Article published 8th November 2017