Our monthly property market review is intended to provide background to recent developments in the property markets as well as to give an indication of how some key issues could impact in the future.
Overview
PROPERTY TRANSACTIONS SLOW, BUT WAREHOUSE DEMAND RISES
Figures from PropertyData show that commercial property transactions slowed to just 89 in August, compared to 232 transactions a year earlier. Meanwhile, the Savills average prime yield remained static at 5.23%, maintaining the highest level since September 2013. Total investment volumes for the year have now reached £23.1bn. To attain the longterm average volume of £44.9bn, capital invested would need to almost double.
INTEREST IN LARGE UK SUPERMARKET SITES SURGES
The pandemic has led to a surge of interest in online grocery shopping and investors are bidding up prices on large UK supermarket sites as a result. According to Colliers, more than £1bn of transactions involving supermarket sites have completed this year compared to last year’s £1.8bn – although this was boosted by the £429m sale of a portfolio of Sainsbury’s stores owned by British Land.
THE CHANGING FACE OF THE OFFICE
Over the last few months as offices reopened up and down the country, returning to normality has not been straightforward. According to Knight Frank, in the immediate term, employees will be allowed back into the office on a permission-only basis. Physical distancing will be essential, while ‘human transit routes’ will be outlined in office buildings to ensure employees stay apart.
COMMERCIAL PROPERTY CURRENTLY FOR SALE IN THE UK
- Regions with the highest number of commercial properties for sale currently are the South West and North West of England
- Northern Ireland currently has the lowest number of commercial properties for sale (32 properties)
- There are currently 1,157 commercial properties for sale in London, the average asking price is £1,091,159