Insights

Brexit Impact on European Real Estate

08/09/2016

European real estate prospects remain encouraging, despite heightened political risk and more uncertainty, says Monika Sujkowska, Analyst, Real Estate Investment Strategy and Research, at Aviva Investors.

Key Points:

  • Our central view is that the impact of “Brexit” on the European economy and property markets will be limited.

  • Brexit highlights that geopolitical risks are noticeable and can be badly mispriced by financial markets.

  • Given the rise of populist politics and anti-European Union (EU) sentiment, upcoming elections in major European states will be closely watched and may spark more volatility

  • We see upside potential in continental European residential markets, student housing, and offices in smaller financial centers. The weaker euro may also boost some luxury retail markets.

  • In the longer term, prospects for some logistics markets could worsen due to the likelihood of protracted trade negotiations between the UK and the EU.

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