The rise of flexible working and the phenomenon of renting desks rather than whole spaces is changing the way commercial property is managed.
It’s likely that an increasing number of large commercial spaces will be altered and converted into smaller units. These would be designed specifically to attract smaller tenants, including sole traders, start-ups and SMEs. Continue reading →
The uncertainty surrounding Brexit and the ongoing negotiations has led to questions over the future of every sector of business. And commercial property is no different.
Following the vote in June 2016, investment in commercial property did fall somewhat. Hotels, office space and retail properties took the biggest hit. However, there is still plenty of demand from tenants and, while initial numbers suggested tentative behavior, it could be a market correction, not a crash. Continue reading →
Fresh evidence indicates that demand for UK commercial property increased in the third quarter of 2016. Richard Carr comments.
Commercial property is becoming increasingly critical to the British economy, now accounting for 10% of the country’s net wealth. Data from PIA (Property Industry Alliance) indicates that the combined value of the UK’s commercial property stock rose by 11% from 2014 to 2015, to reach £871bn. Continue reading →
Recently released statistics indicate that following the fall-out from the UK’s decision to leave the EU (Brexit), demand for Central London office space is now picking back up. Richard Carr comments.
Demand for Central London office space is now picking back up.
Central London is the beating heart of the UK economy. Many global firms have their European headquarters in Central London. This allows global companies to benefit from the UK’s advantageous business laws and taxes, while providing easy access to the EU’s +500m-strong single market.
Experts worried that Brexit would damage Central London’s commercial real estate market, believing that global firms may flee to continental cities like Frankfurt and Paris. These fears were compounded by Prime Minister Theresa May’s announcement that the UK will opt for ‘hard Brexit,’ prioritising sovereignty over the single market. Did this spark an exodus of global firms from Central London?
Leading industry body the Property Industry Alliance (PIA) recently released landmark research. According to PIA, the collective value of UK commercial property climbed to an all-time high last year.
According to PIA, the collective value of UK commercial property climbed to an all-time high last year.
British commercial real estate remains attractive to both domestic and foreign investors. Towards the close of 2015, research carried out by Propertydata suggested that UK commercial property investment would reach record highs of around £70bn. PIA’s recently released figures indicate that high investor demand sent the collective value of British commercial real estate soaring an all-time high in 2015.
Some experts believed that the UK’s decision to vote to leave the EU, would damage London’s commercial property sector. The theory was that overseas investors, who are critical to the market, would begin to shy away from London, as it would no longer be able to serve as a springboard to the EU. New figures have shown Richard Carr that this theory does not seem to hold water.
Overseas investors comprised 78% of commercial real estate bought in Central London
In the aftermath of the referendum, the value of the British Pound dropped to its lowest point since the 1980s. Prime Minister Theresa May recently announced that the UK will adopt a ‘hard Brexit’ policy, potentially cutting it off from the EU’s single market and costing the UK up to £66bn per year. After this, the value of the Pound dropped to a lower point against the dollar.
This has been good for foreign investors, as they now receive more Pounds for their currency, increasing their buying power. A recent report from Arcadis suggests that current market conditions are great for overseas players looking to invest in London’s commercial and residential property sectors. Figures from Savills shows that investors are now flooding into London’s commercial real estate market.
Like in the residential property market, demand is high for prime rental office space in the UK’s main regional cities. Growth across such markets have experience an average increase of 4.3% in the year to June 2015.
Property consultants JLL’s data reflects a solid outlook for the next 12 months for demand and tight supply of new space.
“Sustained levels of occupier demand combined with the decreasing availability of Grade A office supply has contributed to healthy rental growth with year on year increases witnessed in all bar one of the core eight cities,” said Jeremy Richards, dead of national office agency at JLL.