Over 60 percent of commercial property investors say they’re against leaving the European Union


The majority of investors in the UK’s £53 billion commercial property market have said that they want the UK to stay in the European Union. This is because they think it will mean business tenants could rethink their presence in the country. Out of 387 investors, which include some of the largest sovereign wealth funds and insurers across Europe and the USA; some 60 percent said that leaving the EU would make Britain less attractive to buy commercial property.

The survey was conducted by property consultant CBRE Group. A spokesperson from the group said that if the UK was outside of the EU, it would clearly lose some of the benefits and advantages of being part of the EU free trade bloc. Investors are worried that an exit could lead international businesses to look at how much European activity they want to keep in Britain.

The reason that this has come to light is because UK voters could vote in a referendum on the country’s membership of the EU in the next few years. This is because Conservative Prime Minister David Cameron has said he would hold a poll in 2017 if his party wins the next general election. This has stoked concerns the country may exit the trading bloc.

Commercial Property Boom

With the UK commercial property market booming over the past year, research has shown that property is set to produce double digit returns 2014 and beyond. Investments in this sphere are increasing, with 12 percent returns expected this year. After a few tough years, the sector’s now surging, with positive recommendations from investors. Property investment volume hit £53 billion last year, with half of sales made to foreign buyers. This was the highest since 2007’s level of £56 billion. Almost half of this investment was made in offices, with two thirds invested in London and the South East. It’s therefore understandable the investors are jittery about possible changes to this market leap. Many banks and financial managers have also been expressing that they’re in favour of reform rather than leaving the EU altogether. However, for the remaining respondents, 33 percent said it would make no difference while four percent said it would make the UK more attractive.


It is under question as to what extent the prime minister will be able to renegotiate the UK’s position. Founder of research company Capital Economics, Roger Bootle has said the best thing is to reform the EU; but if that’s not possible then the UK should consider a UK exit, dubbed ‘Brexit’. Bootle has said he doesn’t think leaving the EU would be ‘grim’ for the UK as it would mean the UK could be free from the regulatory burden Brussels puts on businesses. Such regulations have been long-complained about by entrepreneurs and small business owners. Bootle says that if Brexit went ahead, the UK could negotiate a free trade agreement with the EU.

It seems that while leaving the EU could initially cause some uncertainty about the future, it’s by no means a given that the UK couldn’t survive out of this structure. However, commercial property investors are perhaps rightly concerned about the disruption it could cause to their market, although it’s a little too early to start panicking yet.

Thanks to Paramount Investment, a commercial property investment company in London for this guest blog.

Author bio: Hannah Lippitt is an experienced copywriter for Property Division, a web design & online marketing agency for the property industry

Image credit: freedigitalphotos.net


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