A recent survey has voted London the most attractive city for real estate investors in Europe, the Middle East and Africa (EMEA). The global survey of nearly 2000 investors conducted in 2017—by property consulting firm, CBRE—put the UK’s capital ahead of Berlin, Madrid, Amsterdam and Paris in terms of desirability.
Several reasons were given as to why London was looked upon so favourably. Those surveyed reported that London was attractive because it is ‘an established market with liquidity and transparency’. They also claimed it offered an ‘attractive risk and return balance.’ Despite the expense of London properties relative to the rest of the UK, many properties in the capital still offer a high yield, which was noted as an important motivation for investors.
London wasn’t the only part of the country to do well in the survey—the UK as a whole was voted the second most attractive location in the EMEA area. Brexit has left many feeling uncertain about the UK’s economic future, but CBRE’s research shows that investors still have plenty of confidence in the UK. Those surveyed described the UK has having ‘surprising economic resilience’. The report confirmed ‘investors are more interested in the UK in 2017 than they were in 2016’.
This suggest that investors are regaining confidence as the dust settles from the UK’s vote to leave the EU. Interestingly, the report also suggests that local political investment may not be as off-putting to investors taking a more global, long-term view. Brexit has not damaged investors’ view of the country, and in Europe, political uncertainty didn’t seem to be having a noticeably negative effect. Although there was ‘some nervousness about the elections in France, Germany and the Netherlands’, this ‘did not seem to have dampened appetite for real estate.’
This is an interesting point to consider, as UK Prime Minister Theresa May has just announced plans to call a snap general election. She stated that her ambition in doing so is to provide certainty and stability for the country before Brexit negotiations begin in earnest; time will tell as to the outcome, but the outlook of investors in the UK may well remain the same.