The threat of Greek exit from the euro is spooking Asian investors, some of whom are focusing on the UK until the dust settles, according to Richard Divall, head of cross border capital markets for the EMEA region at Colliers in London.

The threat of Greek exit from the euro is spooking Asian investors, some of whom are focusing on the UK until the dust settles, according to Richard Divall, head of cross border capital markets for the EMEA region at Colliers in London.

‘An Asian investor told me recently: “We’re not considering continental Europe at the moment – just the UK – until the Greek situation is resolved.” Everyone is just waiting to see what happens next.’

However, any boycott of the eurozone on the part of Asian investors will only be temporary, Divall says. ‘European investors are still extremely active investors in the eurozone. Yes, there will be a bit of panic if Greek exits the euro but after a few months, I would expect it to be business as usual.’

Greece has been left isolated and tottering on the edge of bankruptcy, following its failure on 30 June to make a €1.5 bn payment to the IMF on time, making it the first advanced economy in the EU to default on its creditors. The deadline on Greece’s bailout programmes, inaugurated in 2010, ended earlier this week, leaving the country without a financial lifeline. Greece’s failure to pay has dealt an historic blow to European finance ministers who have worked tirelessly in recent weeks to resolve the impasse over Greece’s financial rescue.

Unsurprisingly, Greece’s woes are making ripples elsewhere in Europe. This week, Berlin value-add residential landlord Ado Properties postponed its €400 mln IPO, citing market volatility caused by the Greek debt crisis. German lender pbb Pfandbriefbank is not believed to be considering delaying its own IPO scheduled for this month – yet, according to those who track the market. A spokesman for pbb declined to comment.

There will be other ramifications if Greece does exit the euro, warned Joe Valente, head of research and strategy, European real estate, at JP Morgan in London. ‘Markets will be volatile, inevitably. I would expect weakening in the leasing markets in the eurozone as corporations put off leasing more space until the dust settles. Bond yields in southern Europe would also increase, putting pressure on those markets. Investors will be driven by risk aversion, so they will look more at markets like London, Germany and Scandinavia.’

In addition, non-core European markets could suffer in light of the Greek debt crisis because financing could become more expensive for them, according to Timo Tschammler, international director and member of the management board at JLL in Germany. ‘Less mature countries are more nervous about the crisis and the impact it could have. The market fundamentals have been disturbed by bouts of volatility, which has resulted in an increase in the Euro Stoxx 50 Volatility Index,’ he said. (Stocks in the index have soared by almost 120% in the past year, trading at €30.51 on 2 July.)

Three main creditors, Germany, France and Italy - held more than 75% of Greece’s total debt at the end of last year. These countries are therefore directly exposed to the risk of Greece defaulting, through bilateral loans and the money they have put into the European Financial Stability Facility fund (EFSF), which has doled out loans to Greece. The exposure from the bilateral loans and the EFSF combined totals around €195 bn, or 61.5% of the outstanding Greek debt. Greece’s debt currently stands at around €320 bn, or a staggering 175% of its GDP, according to the ECB.

Exposure doesn’t stop there, though. Eurozone countries are also exposed indirectly as a result of interventions in the sovereign debt market, which includes the ECB-run Securities Market Programme, to which Greece owns around €28 bn. Similarly, those countries are also potentially exposed to Greek banks, which have borrowed in excess of €80 bn from the ECB’s Emergency Liquidity Assistance (ELA) to boost deposits due to the run on Greek banks, which has forced Greek lenders to cap individual withdrawals at just €60 a day.

Greek prime minister Alexis Tspiras tabled surprise new proposals on Tuesday, asking for the bailout to be rolled over into a new two year lifeline, providing Greece with almost €29 bn to enable it to service some of its debts.

However, European leaders will not negotiate anything new until Greece’s planned referendum on Sunday, German chancellor, Angela Merkel, said in a televised speech on Tuesday. The sudden referendum called on creditors’ bailout terms - which are technically no longer on the table – ultimately amounts to a vote on whether or not Greece stays in the euro, EU leaders say.

And until some of the uncertainty around Greece’s eurozone membership clears, investors would do well to bear one thing in mind: ‘Don’t buy into Europe,’ said Valente at JP Morgan. ‘Buy into specific assets for specific reasons.’