London industrial assets and regional offices are the parts of the UK real estate market that will hold up best in the event of a no-deal Brexit, according to Savills.

The real estate adviser’s research suggests that London industrial property will post the strongest rental growth next, at 1.1%, should the UK leave the EU without a deal.

The sub-sector is closely followed by offices outside London and the South East of England, which has been forecast to experience 1% rental growth in 2020 under a no-deal scenario.

Most other sectors would be expected to show negative or minimal capital growth over the next five years.

Savills based the findings on data that show London industrial assets and regional offices to have low vacancy rates, at 2.4% and 7.8%, respectively.

“Even in the event of a no deal downturn, investors should be buoyed by the fact that rents for industrial real estate will continue to grow,” said Kevin Mofid, head of industrial research at Savills.

“London in particular continues to have historically low vacancy rates and occupier demand continues to rise. As online retail continues to grow the need to have more warehousing located near population centres will remain.”

Savills has assumed 0% growth for GDP, consumer spending and employment, and a resulting recession that is shorter than the one in 2008 and 2009.

James Gulliford, joint head of UK investment at Savills, said: “With most sectors and geographies forecast to show minimal or indeed negative capital growth over the next five years, opportunistic investors are still keen to access markets where rental growth remains a possibility to drive total returns.

“Looking at baseline forecasts, then factoring in a likely economic shock from a no-deal Brexit, London industrials and regional offices are the clear winners.

“However, it should be noted that the duration of such a shock is predicted to last less than the five consecutive quarters of GDP decline during the 2008-2009 financial crisis.”