It was a good run, but after more than decade of market dominance the British are no longer the real estate royals of Europe.
According to Real Capital Analytics, nearly $63 billion in commercial property was traded in Germany last year, compared to just $57 billion in the United Kingdom.
June’s Brexit vote, in which the people of the U.K. decided by plebiscite the leave the European Union, shocked a global investment community already wary of the U.K.’s high property prices.
But despite its new position at forefront of European dealmaking, Germany’s transaction volume dropped 19 percent in 2016, just slightly below the 21 percent European average. The U.K.’s volume, meanwhile, fell a ghastly 43 percent.
The swing in outlook has hit the London luxury market particularly hard, as prices recently fell to 2012 levels, according to the research firm Molior London. Commenting on that drop in an interview with Bloomberg last month, Related Co.’s CEO Jeff Blau said “Uncertainty is bad for business, and Brexit has created uncertainty.”
According to RCA, $489 billion in commercial property traded hands in the U.S. last year, an 11 percent fall.
Back in New York, real estate stakeholders have largely speculated that the U.K.’s loss will be the Big Apple’s gain. A Cushman & Wakefield report last year noted that New York City “may feel its influence grow as its chief rival is distracted.” [MarketWatch] — Will Parker