Investment in Commercial Property on the Increase
The UK commercial property market has been getting a welcome boost from European investors and this has been having a positive effect on market confidence.
Many commercial property professionals still consider that investment coming from Europe will continue to increase over the next 12 months and that this is having a sustained impact on the market.
A survey of commercial property professionals was taken by Lloyds Bank Commercial in conjunction with the Investment Property Forum (IPF), that showed over 70% of the big businesses surveyed expected the market to continue to grow.
This outside investment has changed the way that commercial property businesses are investing currently and has also altered their future strategy as a result.
These investment plans from overseas almost certainly reflect the fact that the UK economy has recovered more quickly than the rest of Europe and has stabilised.
Whilst there are challenges which could affect this influx of European investment with the promise of an interest rate rise coming early next year, this does not appear to be causing a problem or stemming the current flow of investment.
With the recent defeat for the ‘yes’ campaigners in the Scottish referendum, there is now a restoration of belief that there is stability within the United Kingdom, although – as with the residential property market – there are regional performance trends in commercial property also.
London is performing well, as is the North West, with strong investment in this area. The North West is now working towards its market peak which occurred before the financial crisis.
The concern for UK investors is that the influx of foreign investment may have a negative impact by pushing up commercial property prices. Whilst this may be true, there are early signs which demonstrate that if you are looking to build a commercial property portfolio, now might be the time to do so.