A total of 40% of institutional investors plan to increase their investment allocation to European commercial real estate over the next 12 months despite Brexit uncertainty being the number one challenge.

This is according to a study with property-focussed institutional investors by BrickVest, a real estate investment platform.

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The study highlighted that 60% of institutional investors believe Brexit uncertainty will be the biggest challenge facing European investors in commercial real estate over the next 12 months.

Nearly half (46%) thought political uncertainty would be the biggest challenge while 37% suggested it would be low economic growth. Some 31% highlighted rising interest rates and 25% felt it would be rising inflation. A fifth (22%) cited increased regulation as the biggest challenge for investors over the next 12 months.

Despite these challenges, BrickVest’s research highlighted that Brexit could also present some European commercial real estate investment opportunities.

Two fifths (39%) of institutional investors felt that Brexit would increase the number of investment opportunities in European commercial property. Just 22% felt the number of investment opportunities would decrease.

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BrickVest CEO, Emmanuel Lumineau, said: “Clearly Brexit has created some uncertainties and will certainly present challenges for institutional real estate investors, however our research shows that European investors believe investment opportunities could increase.

“Since the vote in June last year, we’ve seen a huge increase in the number of investors joining the platform. We are experiencing strong levels of demand from investors for property as an asset class and it is clear that many of our users want to take advantage of the vote.”