The commercial property transactions in the UK are set to remain high in 2018. Global real estate adviser Colliers International has predicted transaction volumes to exceed £50 billion for a sixth consecutive year.
Though 2017 was a challenging year for the UK property market in view of Brexit and the consequent economic implications, the transaction volume in the commercial sector reached a high of £55 billion. “With recent announcements suggesting more certainty about the post Brexit relationship between the UK and the EU, renewed business confidence will increase demand for quality commercial real estate,” Colliers International, said, in its latest report.
As sterling is likely to remain competitive against the US dollar, further new entrants, particularly from Asia, are expected to explore the market, attracted by buy-side currency plays. The year 2017 saw significant investments from Asian buyers in the London commercial property market. The UK will also benefit because of the property market’s reputation as a safe, liquid and transparent destination for investment, and will continue to attract global institutional money.
According to Colliers, the industrial market will be the top performing core asset class for the second year running as the drive towards greater e-commerce and competition for space drives up rents, particularly in London and the South East.
Many international investors are looking for scale. London will continue to benefit from the stock of large lot size trophy assets, while the growth in UK and pan European specialist platforms will also attract major institutional, private equity and sovereign wealth investors. Development activity in London, says Tony Horrell, CEO UK & Ireland at Colliers International.