The Eurozone’s laborious economic recovery has once again been hit by a political shock. The UK referendum’s direct effects on economic activity will be limited but not negligible, leading BNP Paribas economists to revise their forecasts slightly downward to 1.4% in the Eurozone in 2016. In the long term, the economic consequences will depend enormously on the type of agreement that the British will manage to negotiate with EU members. Given that the UK admits that it is not yet ready to start negotiations, it is really too soon to formulate any conclusions.
The volume of investment in commercial real estate amounted to € 34.7 bn during H1 2016. This represented a drop of 14% compared to H1 2015 which stays the highest first half-year period since 2007. Investment volumes may have slowed down over the last six months but they remained 30% above the 10- year average that stands at € 26.9bn.
Central London (€ 10.7bn) suffered an 18% drop during H1 2016 caused by a wait-and-see attitude regarding the EU-referendum; this drop could strengthen until there is some clarity on the future relationship between the UK and the EU.
Source : BNP Paribas Real Estate