Demand for UK commercial property has slowed in the run-up to the EU referendum, new figures have revealed.
The Royal Institute of Chartered Surveyors (RICS) EU Referendum Paper has found that international demand for UK office, industrial and retail property has decreased since the referendum was confirmed in the second quarter of 2015.
Demand is now at its lowest level since records began in 2014, with just 5% of members surveyed reporting increased interest from overseas companies over the past three months. This was a sharp drop compared with Q2 in 2015, when the figure was 36%.
Uncertainty caused by the EU referendum was cited by 38% of members as the reason why international businesses have been nervous about investing in Britain.
If Britain votes to leave the EU, 43% of respondents believed it would have a negative impact on the commercial property sector, while only 6% thought it would have a positive effect.
RICS chief economist Simon Rubinsohn said: “There is no doubt that since the EU referendum became a certainty following the General Election last May, we have seen a decline in interest from overseas investors in UK commercial property. At least in the short-term, we know that international retailers and service providers are finding the UK market less attractive.
“But we need not view this as a negative, as a result of the market dampening, business rents are also rising at much slower rates, which suggests that we might soon be seeing more favourable conditions for entry and business growth.
“Moreover, it is interesting to see that, despite the climate of uncertainty across all sectors surrounding the impact of Brexit, the long-term view is that we will continue to see the value of land and property assets increase, albeit at a marginally slower rate.”