Investor interest in German commercial real estate has risen above even London's buoyant market, according to research.
"Germany is seen as the safe haven of Europe, it has the strongest economy, a liquid market and the ongoing political uncertainty is not making markets worried," Thomas Schneider, chief investment officer and founder of online marketplace BrickVest, told CNBC over the phone.
According to BrickVest's research, which surveyed 3,500 people, one in three commercial real estate investors say Germany is the top region to invest in Europe — beating the U.K. for the first time since 2015. With Brexit putting a cloud of uncertainty over the future of U.K. firms, investors doubt that these companies will make strong commitments when it comes to their rents. As a result, the returns in U.K. office space are seen as limited and investors have started looking elsewhere.
Meantime, continental Europe has returned to growth after the euro zone debt crises, making the region more attractive to real estate investors. "The market has been exceptionally hot, we've seen prices driven higher, we've seen record volumes, particularly in continental Europe," Neil Blake, global head of forecasting at real estate firm CBRE, told CNBC Tuesday.
He said that one of the most interesting spaces is flexible office areas: "People want shorter, more flexible leases. I think it's the internet arriving in commercial property."
"Germany is benefiting from Brexit," BrickVest's Schneider added, highlighting that this is set to be the case for at least another year. "Rental prices in the U.K. are simply too high," he added.
Some banks, including , have said they will increase their workforces in Frankfurt following the U.K.'s decision to leave the European Union. Rental prices in this city have been on the rise, seemingly supported by these potential moves by the banking sector.