International businesses to cease investment in Yorkshire and Humber amid Brexit fears
The uncertainty surrounding the EU has caused international businesses to postpone investment in Yorkshire and Humber, a new paper by the Royal Institution of Chartered Surveyors (RICS) has revealed.
The RICS EU Referendum Paper - which examines the pros and cons of the UK remaining and exiting Europe - includes new survey data showing that there has been a steady easing in international demand for Yorkshire and Humber’s office, industrial and retail property since the referendum was confirmed in Q2 2015.
The demand indicator among international investors for commercial property in Yorkshire and Humber is now at its lowest level since RICS records began in 2014, with just 5% of RICS professional’s surveyed reporting increased interest from overseas companies over the last three months. This is a significant dip from Q2 2015, when the figure was at 36%.
Uncertainty caused by the EU referendum has been cited by 38% of chartered surveyors working within the sector as the reason why major international retailers and other businesses have been nervous of investing in Britain.
Should Britain leave the EU, 43% of respondents felt that it would have a negative impact on Yorkshire and Humber’s commercial property sector and only 6% said this would have a positive impact on the commercial property sector.
The EU Referendum Paper shows that key industries from residential housing to construction and rural have been hit by short term uncertainty. However, across the board, in the longer term, steady growth is still predicted across rural, land and built environment sectors.
Simon Rubinsohn, RICS chief economist, said: “There is no doubt that since the EU referendum became a certainty, 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 new local startups 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.”
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