Whilst the UK commercial property market may have taken an initial hit from a certain referendum that didn’t exactly go under the radar, a number of experts are going into 2017 with a refreshingly positive perspective.
As Britain prepares to officially break-up with the EU, industry leaders are managing the expectations of commercial property investors, pointing out that prices will not return to previous highs. However, these experts have also shunned the idea of an immediate crash, which was spurred by the initial drop in share prices for real estate investment trusts following the June referendum.
Martin Clark, managing partner at Stiles Harold Williams – property advisory firm with a management portfolio of approximately $16 billion – described the current market as “buoyant despite uncertainties” posed by Brexit and feels “cautiously optimistic” going into 2017, report The Argus.
Clark spoke of continual demand from commercial property occupiers in 2016 “seeking out opportunities in the face of dwindling availability”, resulting in a spike in rent returns and lease renewal opportunities. A recent CBRE statement in fact highlights that rental values for commercial properties rose 1.7% on the year.
A survey of forecasts by the Investment Property Forum also reinforces Clark’s predictions, stating that rents will remain high enough to ensure total returns are positive, despite a predicted drop in commercial property value. Interest from overseas will also surge given the current value of the sterling, boosting investment volumes in 2017, according Colliers International.
It’s a topic that has certainty split opinions within the industry, but such levels of promise for the commercial market are, without doubt, a significant improvement from the initial post-Brexit concerns echoed around the industry.