Uncertainty surrounding Brexit has had an adverse impact on investor sentiment when it comes to investing in the UK’s property market, which has been to Germany’s advantage, according to the Emerging Trends in Real Estate Europe 2017, published jointly by the Urban Land Institute (ULI) and PwC.
The report states that the UK’s decision to leave the EU has left many investors and developers uncertain about the UK’s short to medium-term future, with 90% of those who took part in a survey forecasting that UK investment and property values will drop over the next 12 months.
But while investment in the UK wanes, leading cities in Germany are emerging as safe haven property investment hotspots, according to the report, which is based on the opinions of almost 800 property professionals in Europe, including investors, developers, lenders, agents and consultants.
“The fallout from the Brexit vote gives an extra boost to the already-strong German real estate market,” said ULI Europe chief executive Lisette van Doorn.
“With considerable political and economic uncertainty in Europe, many real estate investors are willing to sacrifice some yield in return for lower risk. In this risk-off environment, the stability of German cities becomes even more attractive.”
A separate report, released by BrickVest last week, found that many institutional property investors are now targeting deals in German cities, including Berlin, Munich, Frankfurt and Hamburg.