19 April 2017 | Herpreet Kaur Grewal
The UK remains the preferred region to invest in commercial real estate despite seeing a slight dip in popularity since Brexit, according to the latest BrickVest commercial property investment barometer.
In March 2017 nearly one in three (30 per cent) respondents selected the UK as their preferred commercial real estate investment location, down slightly from 31 per cent in March 2016.
BrickVest's survey found that a quarter (25 per cent) of respondents favour Germany as their second location of choice for commercial real estate opportunities - the same as last year. Fewer than one in five (18 per cent) selected the US, which represents a fall from 21 per cent last year. The same number (18 per cent) also selected France, although this is an increase from 14 per cent in 2016.
The barometer reveals that both German and French investors favour the UK less since March last year, however. Fewer than one in five (19 per cent) French and the same number of German investors suggested that they prefer the UK in March this year compared with 24 per cent and 22 per cent respectively last year.
US investor sentiment towards the UK fell marginally from 23 per cent to 22 per cent.
Despite Brexit and the possibility of a second Scottish referendum being called within the next few years, nearly half (46 per cent) of BrickVest's UK commercial real estate investors selected their home market as their preferred location, up from 44 per cent in March 2016. BrickVest's UK investors suggested Germany was second (19 per cent), the US (16 per cent) third, and France (14 per cent) fourth in terms of preferred locations to invest.
According to BrickVest's investors, the average risk appetite index among its US investors remains growth-oriented and relatively unchanged in the past 12 months at 56 (58 in 2016). UK investor risk appetite also remained largely the same at 55 (54 in 2016) despite its choice to leave the EU. This indicates that investors' risk appetite is fairly balanced, albeit slightly leaning towards the riskier spectrum.
BrickVest's barometer also showed that the investment objective for the majority (48 per cent) of its online investors is capital growth compared with the 37 per cent who opted for income.