What:
This week we look at commercial real estate investment volumes on a bi-annual basis. The figures cover all asset classes. The chart shows that during H1 2021 a total of £25.2bn was invested, which is up on both the corresponding 2019 and 2020 figures and roughly in line with the five-year H1 average of £25.8bn. What the chart doesn't show is that June alone accounted for £6.4bn, which is by far the largest monthly figure so far in 2021. What's more, office investment returned to pre-pandemic levels and the industrial sector had one of its best months ever. Residential and student housing also continue to attract investors, with the sectors attracting £2.3bn and £1.8bn respectively in H1.
Why:
Fears of investment activity slowing at the start of the year due to a renewed lockdown now seem overplayed. Hopes are therefore justifiable that ongoing travel restrictions may not result in a dramatic weakening of transactional activity similar to what we have seen during the multiple lockdowns in 2020. With equity and commodity markets volatile and yields on 10-year treasuries, gilts and the bund all falling recently, commercial property remains a desirable asset class for investors.
