Europe's commercial real estate (CRE) markets are facing increasing risks, not least from the UK's EU referendum, according to a new report by Moody's Investors Service.
While the sector will be supported by a "robust" economic performance in Europe, it is also under threat from emerging markets, China, the refugee crisis and lower commodity prices.
Magdalena Umsonst-Suminska, a vice president at Moody’s, said: "European CRE markets are supported by a stable macro-economic outlook for European economies with overall positive GDP growth, even though downside risks are on the rise, in particular due to the forthcoming Brexit referendum."
She added: "Within a Brexit scenario, in our view UK GDP would be slightly lower, on a cumulative basis, following a vote to leave the EU. This would reflect delays to investment and other spending as a consequence of the increased uncertainty following such a vote.
"However, we would not expect Brexit to permanently lower the sustainable pace of economic growth in the UK."
The report suggested the impact of greater uncertainty would likely be offset by a weaker sterling exchange rate. This could help offset weaker domestic spending, Moody's said.
The Moody's report said growth - forecast for overall GDP growth of 1.5 per cent in 2016/17 - is limited due to "very low inflation in the Euro area, dampened by low commodity prices, hampering debt deleveraging and constraining consumer spending".
Moody's also warned lower growth in emerging markets and China will “dampen exports from Europe, weighing on growth across the region”.