The UK will “flirt” with a downturn next year but avoid a full recession, according to CBRE Global Investors’ chief economist Sabina Kalyan.

Speaking at the annual conference of the European Public Real Estate Association (EPRA) in Paris today, Kalyan said the UK will “take a knock”, but the impact will not be significant.

Kalyan said CBRE Global Investors, one of the world’s largest real estate investment managers, is forecasting a 12% average fall in values for all property.

“There’ll be no real major economic market impact,” she said of the UK’s vote in June this year to leave the European Union.

“The UK will not fall off a cliff. Brexit just accelerates the downfall we were already expecting, bringing it forward from 2018. The UK was already late cycle before (the vote for) Brexit.”

In the immediate aftermath of June’s referendum, Kalyan said, a 5% discount had allowed CBRE Global Investors to invest in “good quality” assets held by suspended open-ended property funds.

Rumours of distress, she said, had been “overstated”.

A major impact of the vote, Kalyan said, is on monetary policy forecasts. “Cheap sterling is a very powerful, automatic stabiliser, it keeps tourism at home, it boosts leisure,” she said.

Kalyan said UK car manufacturing was one sector that would benefit from a weaker pound.

Highlighting the increased role of politics, Kalyan said certainties in the global economy are “not easily captured by economic models”.

Brexit, along with terrorism and security issues, are making investors “a little bit wary” of the European region, she said.

“It’s not about winners and losers in Europe, but [rather] does Europe win at all? Capital is going to Americas because of these concerns,” Kalyan said.

“Fleet-footed” investors, she said, are already buying assets in other European cities in anticipation of a “Brexit bounce”.

Fellow panellist, Michiel te Paske, research analyst at Morgan Stanley, said the UK “looks quite attractive” on “a relative basis” when considering forthcoming elections in France, Germany and the Netherlands, and persistent risks relating to Greece.

Quentin Freeman, head of investor and corporate communication at Derwent, said that all leasing deals that the London-based firm had lined up pre-Brexit “went through with no change to terms”.

“The issue on investment is that it’s a bit of a standoff,” he said. “Buyers are hoping to buy cheaply while sellers are now asking why do I need to sell?”

Freeman said transactions “will happen and levels will be found”. He added: “We see no reason for yields to move out.”