The failure of the constitutional reform referendum in Italy on 4 December 2016 had a predictable effect on the Italian political scene and a less predictable impact on the ability of Italian banks, notably Banca Monte dei Paschi di Siena, to extract themselves from the financial mire that they find themselves in without falling foul of EU state-aid rules.

According to Savills, some noncore European commercial real estate markets saw stronger investment volume growth last year than core markets, due primarily to a lack of stock in core markets and to the impact on investor sentiment of the uncertainty caused by the EU referendum in the United Kingdom.

The one megafund that launched during December 2016 was International Campus AG’s €1 billion student housing fund, the FIZZ Student Housing Fund SCS, with Allianz and an investor represented by CBRE Global Investment Partners as cornerstone investors.

The United Kingdom’s vote in June 2016 to leave the European Union has the potential to redefine the pecking order of global cities, as London seeks to maintain its dominant position while the country negotiates its divorce settlement with the rest of the continent.

This issue’s lead story is about views on the real estate market effects of Brexit, now and to come. That’s fine; that’s what I asked James Buckley to do. But we know that Brexit goes so much wider.

The lower-for-longer interest rate environment is helping to keep the yield gap between government bonds (see the “10-year government bond yields for select EU countries” chart on page 25) and real estate at high levels and is persuading investors to consider further increasing asset allocation to real assets.

A vast surplus in demand, a balanced risk/return profile and positive future prospects make micro-living in Germany an attractive alternative investment for international institutional investors.