Demand for commercial property investments rebounded following the UK’s June referendum on membership of the European Union, according to the Royal Institution for Chartered Surveyors (RICS).
The RICS UK Commercial Market Survey for the final quarter of last year found that demand from overseas buyers was up across all areas of the market, despite concern surrounding the potential relocation of companies based in the UK.
Simon Rubinsohn, RICS chief economist, said the results of its survey suggest that the commercial property market is continuing to attract investor interest, despite ongoing concerns about pricing in the capital and the prospects for the economy.
“The feedback we have received is consistent with a renewed appetite from overseas buyers for UK assets,” he said.
Results for the occupier market highlight the resilience of the economy, he said, “but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers increasing go online to make their purchases”.
The supply of property for investment purposes fell in both the office and industrial sectors, but was broadly unchanged in the retail segment.
A weaker exchange rate was a likely factor, RICS said, with 20% more respondents seeing a rise in demand in foreign investment enquiries.
In London, RICS found that foreign investment demand grew strongly across each sector of the capital, with the sharp decline in sterling since June particularly prominent in enticing overseas demand. Investment trends in the UK capital remain mixed, the survey found.
Post-Brexit caution pushed London’s office sector into fourth place in a list of preferred investment locations, according to the association for Investors in Non-listed Real Estate Vehicles (INREV).
The safe-haven status of London offices fell from the number one preference last year to fourth place (at 48%) in the global Investment Intentions Survey 2017, carried out by INREV.