Wednesday, August 01, 2023
Experian predicts commercial property investment slowdown
Commercial property investment is suffering a sharp slowdown which will continue over a number of years, according to the latest property forecasts by Experian®, the global information solutions company.
"We are not optimistic about the next few years," commented Simon Marx, head of Real Estate Forecasting & Analysis at Experian. "Investors are becoming nervous and it is not clear which locations or sectors will yield the best future returns. As a result, lower risk havens such as London offices are being targeted."
Marx is quick to point out that it is not all doom and gloom. "Covering over 220 markets in the UK, Experian's property forecasting service is well placed to separate the top performers from the rest of the pack. For those that are over-exposed to the worst performing sector, the retail market, there are still strong gains to be made in Eastern UK. Our forecasts for rental growth in markets such as Cambridge are quite positive. And long-term holders of retail property will take comfort in the fact that we expect the retail sector to re-emerge as one of the strongest over the medium to long term. There are also industrial markets in and around London with bright prospects."
Marx adds: "An all-out property crash is not on the cards. We believe that active foreign investors will continue to target the mature, liquid UK property market, albeit more cautiously. The arrival of hedge funds and the exponential growth in indirect trading are good indicators of a rapidly maturing asset class and underline the UK's standing as the pre-eminent property market in Europe."
"We are not optimistic about the next few years," commented Simon Marx, head of Real Estate Forecasting & Analysis at Experian. "Investors are becoming nervous and it is not clear which locations or sectors will yield the best future returns. As a result, lower risk havens such as London offices are being targeted."
Marx is quick to point out that it is not all doom and gloom. "Covering over 220 markets in the UK, Experian's property forecasting service is well placed to separate the top performers from the rest of the pack. For those that are over-exposed to the worst performing sector, the retail market, there are still strong gains to be made in Eastern UK. Our forecasts for rental growth in markets such as Cambridge are quite positive. And long-term holders of retail property will take comfort in the fact that we expect the retail sector to re-emerge as one of the strongest over the medium to long term. There are also industrial markets in and around London with bright prospects."
Marx adds: "An all-out property crash is not on the cards. We believe that active foreign investors will continue to target the mature, liquid UK property market, albeit more cautiously. The arrival of hedge funds and the exponential growth in indirect trading are good indicators of a rapidly maturing asset class and underline the UK's standing as the pre-eminent property market in Europe."
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