Expected August CRE slowdown coincides with expected economic uptick
While disappointing, the August slowdown in both investment and occupier activity was not completely unexpected. After all, the government’s change in guidance promoting a return to office working coincided with a further easing in travel restrictions and the holiday season. As a result, investment sales volumes slowed to just over £1bn. The good news is that as of mid-September, this figure has been surpassed already, suggesting a strong final quarter. In the City of London alone, over £2bn worth of deals are under offer and another £2.7 bn of investment stock is available.
The economic news has also improved. GDP and retail sales continue to rise strongly, suggesting that the first technical recession since the global financial crisis is probably over already. The short term outlook, though, remains uncertain and depends as much on the Brexit end game as it does on the business and consumer response as the government furlough scheme ends. In the short-term, downside risks may outweigh upside risks, but October may (or may not) also bring a new Budget and with it new surprises.