International businesses are postponing investment in Britain in the wake of EU uncertainty and the Brexit debate, 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 UK office, industrial and retail property  since the referendum was confirmed in Q2 2015.

The RICS research has shown demand for UK commercial property among international investors stalls as referendum approaches. The survey shows that short term uncertainty has contributed to falling international investment demand in central London, that rental and capital value projections scaled back after 2015 announcement of EU referendum, and only six per cent of survey respondents say Brexit will have positive impact on commercial property sector.

Uncertainty caused by the EU referendum has been cited by 38 per cent of RICS members 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 per cent of respondents felt that it would have a negative impact on the commercial property sector and only six per cent said a Brexit scenario would have a positive impact on the commercial property sector.

The EU Referendum Paper shows that a range of 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.

RICS chief economist, Simon Rubinsohn, said: “There is no doubt that since the EU referendum became a certainty following the General Election last May, 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.

“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.”

Andrew Hawkins, director of capital markets at JLL, said: “Commercial investment has slowed more than it would normally do in the first quarter. Investors and occupiers are pausing before making any long term investment decisions in real estate in the UK, but, we’ve seen greater investment interest in Dublin, Paris and Frankfurt.”

Simon Light, client development director at Arcadis, said: “Demand for construction services is very real and demand for skills and the capability has never been so strong. A Brexit will probably reduce demand. As the market has been overheating, the referendum has given developers an opportunity to wait before committing to further investment. What is clear is that the construction supply chain is very integrated right across Europe.”

Asked if London might lose its attraction should there be a vote to leave, Mr Hawkins said: “London’s  success is built on an open economy. It attracts skilled people, which is why people like Google and Facebook set up here.  London will continue to be strong but we’d see the regional markets become more domestic and growth would be slower.”


The RICS Royal Charter requires that the body serves the public’s interest and as such, it will not provide a steer on which way to vote. As such, the EU Referendum Paper, objectively examines various scenarios, but does not take the analysis to the next stage of a ‘stay or go’ conclusion.