All eyes are on the UK commercial property market, as global investors seek to predict where the economy will go next?
As we enter Q3 with the highest UK interest rates for a generation, but the stubbornly high inflation is finally in reverse. As such, the outlook following our survey is more positive, and we could see the sector rally before the year is out.
It’s far from plain sailing and we can still expect to see some assets sold at discounts, but these sales might be structured in such a way so as to disguise the true discount-to-book value. We are also expecting to see an increase in change of use applications, with landlords seeking to convert older commercial stock into residential and capitalise on the rising private rental market.
You can download the FULL REPORT here , but I am also pleased to share some top line numbers below.
- increasing disparity between vendors and purchasers, with overall commercial sales prices per square foot expected to come down by 1.5% on average over the three months;
- increased demand for high quality offices in prime locations;
- the Office and Retail sectors are expected to be the worst affected, with sales prices expected to drop by 1.8% on average over the quarter;
- retail sector continues to be challenging, with sales prices per square foot expected to drop by an average of 1.8%;
- tenants would still prefer the flexibility of shorter leases within the hospitality and leisure sector with average lease length will be between 30 and 40 months.