Investment has been steadily increasing since the beginning of the month, due to relaxed lockdown measures
Investment volumes at the half way point of this month have already surpassed May’s total figure according to latest insights from global real estate advisor, Colliers International.
According to data up to 17 June 2020 investment activity has reached £760 million, whereas the total for the entire previous month of May 2020 only reached £751 million, and £860 million the month prior (April 2020). The most recent figures point to the start of a bounce back as the UK’s lockdown measures ease further allowing for more site visits and inspections to take place.
Globally, monthly volumes are around 70 per cent down against the five-year monthly average. In the UK the largest deals in May 2020 were a mix of UK portfolios and single London assets.
Oliver Kolodseike, Associate Director in Colliers’ Research & Forecasting team said: “We have seen activity come to an almost complete standstill throughout April and May, however the early signs for this month suggest that momentum is building, and last month’s total transaction volumes has already been surpassed. These deals would have been agreed in early May, which may also suggest that the logjam in completions may be breaking up as physical inspections for due diligence becomes easier.
“No sector or country has been immune to the mounting pressure from global lockdown measures and international travel restrictions. Looking ahead, we are still predicting opportunities for rental and price growth in sectors with a general lack of supply such as offices, housing and some industrial space. However, these growth opportunities may be pushed into next year.”
Activity across the sectors in May 2020 remained subdued with office investment totalling £217 million across 16 deals, and the industrial sector slowed to £85 million across 23 deals.
In retail, transactions picked up from April’s £74 million to £225 million, significantly boosted by British Land’s sale of a 26-unit Sainsbury’s portfolio to Supermarket Income REIT for £102 million, and a Tesco site in Bristol for £42 million. However, understandably occupiers have struggled to keep afloat at these times, with 29 retail company failures affecting 1,481 stores in the first six months of this year (this amounts to already 70% of last year’s total failures).