#MIPIM Shadow of EU exit hangs over UK real estate - CBRE

A referendum vote to leave the European Union would pose a significant downside risk to commercial real estate investment demand in the UK, according to the latest research from global property adviser CBRE.

The initial findings are from CBRE's annual survey of European Real Estate Investor Intentions to be released at MIPIM in Cannes on Wednesday 12 March.

With the UK attempting to embark on a renegotiation of EU membership terms and the current prime minister David Cameron committed to holding an 'in/out' referendum after the next general election due in 2015, assuming his party is in government, CBRE asked investors what effect a vote to leave the EU would have on the UK's attractiveness as a property investment location.

Over 60% of both UK and non-UK investors indicated it would make the UK less attractive for investment. Only 6% of UK and 4% of non-UK investors believe that exiting the EU would make the UK a more attractive location.

As many as 36% of non-UK-based investors said it would make the UK 'much less attractive', with 22% of UK-based investors taking the same view. The significance of the views of non-UK investors is underlined by the high proportion of UK property investment activity accounted for by foreign investors. In 2013, 48% of all investment sales in the UK were to foreign buyers, with 38% to global investors from regions outside Europe.

The negative feelings about a possible EU exit have hardened considerably since last year. In the 2013 survey, only 30% of UK investors and 45% of non-UK investors thought that the proposal to hold a referendum on the UK’s membership of the EU made the UK a less attractive location for investment.

Peter Damesick, chairman of EMEA Research, commented: 'There have been growing signs of uneasiness among both domestic and foreign business in the UK regarding the potential consequences of exit from the EU. Our survey findings show that this uneasiness is widely felt across the European property investment community - very few investors can see a benefit while a large majority see a downside.'

The full results of CBRE's European Real Estate Investor Intentions Survey, including responses on the regions, countries, cities and sectors seen as most attractive in 2014 by investors will be presented at the CBRE Global Investment Forum at 8.45 am (CET), Wednesday 12 March at Room Marta, Majestic Hotel, La Croisette, Cannes.