New Year celebrations for investors

Based on the performance of commercial property over the last twelve months, 2014 is looking optimistic in terms of the UK commercial property sector. Morgan Pryce recently reported on London’s high – and increasing – take-up and rental rates, and given that the UK’s economy is at the beginning of its recovery, positivity should continue into next year.

Recent statistics, including those from CBRE, show that property is outperforming other investment types, with returns on investment this year matching the strong rental figures. CBRE’s figures show that their property investment gain had increased this year to 9.3%, with other funds reporting the best returns since 2010. 

Looking ahead to the coming year, it is likely that investment will continue, boosted by such year-end figures now being published. It is quite possible that the levels of investment will increase, both in the capital – which may have its own effects on rent levels and supply/demand – and in the regions. Given the rise in rents in London, and the gradual improvement in the UK economy, certain investors are looking towards regional cities’ commercial property offerings. While the regions may be more vulnerable to economic fluctuations than London, they can offer better yields to investors than in the capital, where capital prices as well as rents are high; in the UK’s other major cities the capital values are less, especially given the economic downturn of the last few years, but the rents can still be rewarding. 

If the economy continues to improve in 2014 it is expected that take-up will increase also across the UK, with demand arising from new and expanding businesses, while supply may also increase, with construction and regeneration recommencing.

While a property bubble in terms of residential property is on the minds of many, there is more evidence of this in London/the south east than in the rest of the country, where many families are still feeling the effects of austerity cuts and increasing cost of living. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.