UK commercial property volumes to exceed £50bn in 2018

 
Helen Cahill
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Workers In Offices At Night In London
Institutional investors have been net sellers of commercial property since 2016 (Source: Getty)

Sales in commercial property are tipped to exceed £50bn for the sixth year running this year.

Transaction volumes in the UK’s commercial property sector reached £55bn last year, according to Colliers International. The real estate firm expects volumes to remain above £50bn in 2018.

And, although the capital continues to benefit from its stock of skyscrapers and traditional office spaces, the flexible working trend is set to continue growing in the year ahead.

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In London, WeWork’s presence is expected to reach 3.5 million square feet, which is likely to put pressure on landlords to provide more flexible working spaces.

Meanwhile, the industrial sector is forecast to continue its growth as retailers seek out warehouse space for online products.

Colliers International has predicted industrial assets will be the top-performers for the year, especially in London and the South East. The competition for space could also lead to mixed developments for homes and warehouses.

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Mark Charlton, head of UK research and forecasting at Colliers International, said: “Property performance is likely to moderate in 2018 as pricing remains pressured and rental growth modest, but on the up-side, the market will become less volatile, offering attractive, stable returns for investors.”

And, foreign investors are likely to maintain their interest in the UK market due to sterling’s devaluation.

“With sterling likely to remain competitive against the US dollar, further new entrants, particularly from Asia, are expected to enter UK market, attracted by buy-side currency plays,” said Tony Horrell, chief executive for the UK and Ireland at Colliers International.

“The UK will also continue to benefit from ongoing questions surrounding US and Chinese foreign and economic policies, as its reputation as a safe, liquid and transparent haven for investment and will continue to attract global institutional money.”

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