CoStar Brexit Survey Part II: Confidence returns

By Paul Norman - Friday, May 05, 2017 9:37

A significant majority of UK property professionals are feeling more confident about the performance of UK commercial property 10 months on from the country’s EU referendum vote, and most think global investor sentiment towards the UK has not been harmed, according to the updated CoStar News Commercial Property Brexit Survey.

CoStar News has once again surveyed its 30,000-plus readers to gauge attitudes towards the Brexit vote among real estate professionals, this time in the wake of the triggering of Article 50.

The survey found that 68% of respondents were more positive about the performance of UK commercial property markets in March 2017 than they were in the immediate aftermath of the vote in July 2016, with 32% feeling less positive.

Those surveyed are also broadly in agreement that commercial property prices have stabilised. 57% of respondents expect prices to remain stable over the next 12 months, while 11% expect them to rise and 32% expect them to fall.

Despite the clear improved confidence in how UK commercial property will fare in response to Brexit, 70% of respondents still believe that uncertainty caused by EU exit negotiations remains the greatest challenge to the performance of the real estate sector over the next 12 months.

There has been little change in terms of the sectors most expected to be harmed by Brexit. 

59% of respondents expect London offices to be most negatively affected, compared to 67% in the wake of the vote. There has been a slight increase in pessimism towards retail outside of London, while industrial is still perceived as the most Brexit-proof sector.

 

59% of respondents expect London offices to be most
negatively affected, compared to 67% in the wake of
the vote. There has been a slight increase in pessimism
towards retail outside of London, while industrial is still
perceived as the most Brexit-proof sector.
Respondents are convinced that London will maintain
its strong appeal to financial institutions, with 78%
of those surveyed saying that London will not lose
its position as Europe’s leading financial centre to
another location because of Brexit.
CREFC Europe, the industry body representing
commercial real estate lending, also supplied a
question, asking how the Brexit negotiation period will
affect credit flows across Europe. The picture is mixed.
The largest section of respondents (33%) expect credit
flows to UK and European CRE to remain stable, as
opposed to 26% expecting a fall.59% of respondents expect London offices to be most negatively affected, compared to 67% in the wake ofthe vote. There has been a slight increase in pessimism towards retail outside of London, while industrial is still perceived as the most Brexit-proof sector.

Respondents are convinced that London will maintain its strong appeal to financial institutions, with 78%of those surveyed saying that London will not lose its position as Europe’s leading financial centre toanother location because of Brexit.

CREFC Europe, the industry body representingcommercial real estate lending, also supplied aquestion, asking how the Brexit negotiation period will affect credit flows across Europe. The picture is mixed.

The largest section of respondents (33%) expect credit flows to UK and European CRE to remain stable, as opposed to 26% expecting a fall.

CoStar News's updated Brexit Survey was first published yesterday in CoStar's Q1 2017 Commercial Property Investment Review.For more information and analysis on these themes, including an update on our recently launched repeat sale indices (which measures price movement by looking at instances where the same property has sold twice), a special feature on the national occupier market, and an Article 50 Sentiment Survey, please log in to CoStar to access our Q1 2017 UK Commercial Property Investment Review.  If you are not yet a client, please email sales@costar.co.uk.

pnorman@costar.co.uk

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