UK commercial property investment proves triumphant in 2015
UK commercial property investment has emerged as a one to watch in 2015.
Overall, throughout 2014, returns were generally on the up. The recovery of the sector has generally been led by commercial offices which have witnessed capital growth rises of 1.5% in May 2015 (Knight Frank). When compared to retail, which only recorded a 0.2% increase in the same period of time, it is clear that some areas of this vast sector are outperforming others.
The Knight Frank June market outlook shows that across all commercial assets, capital growth increase by 0.8% in the month of May – up from the 0.5% recorded in April.
According to the report, UK commercial property investment continues to grow. In the first six months of the year, the sector received £23.6 billion worth of investment. This figure is notably higher than the £17.8 billion which was invested in the first half of the previous year.
Commercial sales hit new highs
Figures from HM Revenue and Customs show that over the past year, 115,400 sales were made in the UK’s commercial market. This marks the highest number of transactions since the economic downturn.
The market has rebounded since 2008/2009, when only 92,900 sales were made as demand dwindled in the face of economic uncertainty.
Sentiment continues to grow in the market and this has attracted overseas investors who are looking to branch out into the UK’s property market.
A spokesperson from EMW recently commented, “There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors.”
With rising yields and stronger capital growth prospects, the UK commercial property investment market is likely to experience a record breaking year in 2015.