Britain’s upcoming referendum on its EU membership — known as “Brexit” — has almost completely killed overseas investment in commercial property, according to a survey released on Thursday by the Royal Institution of Chartered Surveyors (RICS).
Only 5% of RICS firms reported an increased demand from international investors for British commercial property in the last quarter — compared with 36% from the same period last year.
London was hit hardest, with 80% of respondents agreeing that Brexit uncertainty had curtailed overseas investment in the capital.
The report added that the most likely beneficiaries of a Brexit would be Paris, Frankfurt and Dublin as many corporations would move their offices to remain in the EU trading bloc.
Economists have struggled to predict how Britain will be affected in the wake of a Brexit, and this is reflected in the polls, with neither the “Leave” or “Remain” campaign taking a significant lead in the last month.
Even the recent pleas by President Obama for the UK to stay in the EU didn’t sway opinions, with the Leave faction even edging ahead in a recent YouGov poll.
The RICS report concluded that despite the investment slowdown, the UK would probably be fine even if a Brexit happened:
“London is likely to remain a magnet for investment, but it is harder to anticipate how other major cities and the devolved nations will be affected. Scotland’s pre-referendum slow-down in commercial activity still saw degrees of investor appetite and occupation, and witnessed a bounce-back from held back investment and occupation decisions.”