UK commercial property transaction volumes for H1 2020 might be considered disappointing after a strong start in Q1. In fact, the near £20 billion that was transacted might reasonably be considered ‘respectable’ given the almost complete government mandated shutdown of the UK economy in Q2. UK commercial property investment usually includes a second half surge, especially in the last quarter, as unfulfilled annual investment mandates are fulfilled at the last minute. An analyst might be forgiven for optimism.
Even in this COVID-19 impaired year, hopes for a strong year end are not misplaced. Many deals in the first half were postponed, not cancelled. This is already evident in September’s investment recovery (£4.5 billion) and the momentum that was evident in October which is likely to see close to another £4 billion transacted when the final figures are reported. Furthermore, the weight of global capital continues to drive new demand spurred on by undervalued sterling and yields that are internationally competitive.
The latest new lockdown announced on 31 October may have dampened spirits, but access to assets has not been restricted, and UK property market metrics remain appealing. This is especially true for long-term cross border investors who are otherwise undeterred by economic and political uncertainty.‘UK commercial property investment usually includes a second half surge, especially in the last quarter as unfulfilled annual investment mandates are fulfilled at the last minute.’
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About the Author
Chief Economist, and Head of Research of Forecasting at Colliers International, Walter Boettcher has over 20 years UK and European property industry experience. Highly renowned for his publications on Brexit, Economic Outlook & Trends, and Property Cycles, Walter has redefined how research can be used to support agency and professional services business development.
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