Concerns that the U.K. might vote to exit the European Union on June 23 is causing the majority of international property investors to put purchases on hold, according to a survey by broker Cushman & Wakefield Inc.
Sales of income-producing U.K. commercial property fell 28 percent in the first quarter to 10.7 billion pounds ($15.6 billion), the report showed, amid fears that demand for space would fall and the economy would weaken if Britain votes to leave
Most buyers wouldn’t immediately rush for the exits if the U.K. votes to leave, the survey of landlords based outside the EU, who collectively manage $650 billion of property, found. “Investors won’t want to sell immediately and be seen as forced sellers,” Nigel Almond, head of capital markets research at Cushman & Wakefield, said in an interview. “We are probably going to have a two-year period of negotiation over the terms of a Brexit, so people will want to take stock and consider their approach.”
If the U.K. does vote to leave, most investors would look to other regions for future purchases, with those outside Europe the biggest winner, the survey showed. “The U.K. is a big part of the EU, so there is going to be short-term impact on European markets as well in the event of a Brexit,” Almond said.