The level of transactions occurring in the UK's commercial real estate markets has been affected by the weak economy, lack of finance and investor uncertainty. This is the finding of the latest Property Snapshot from Colliers International, which noted the volume of direct property deals for the year to date is currently around 40 per cent of the level recorded in 2011. The organisation explained investors in the UK may be waiting for quarterly valuations to be finalised, which will provide "greater pricing clarity".
London remains the country's strongest market, with the company commenting: "Central London asset prices are firm, supported by foreign investors, but regional asset prices are pressured, with secondary and distressed assets coming to market." Offices are still the most popular type of property among buyers, with overseas funding helping to buoy the sector. Interest from Middle Eastern investors in retail units continued in the first quarter, the firm added, while deals in the industrial market were "very limited" in this period. One of the factors holding back UK real estate investment is the lack of available finance, with Colliers reporting new lending on property fell by GBP 1.1 billion in February and a further decline is anticipated in the second quarter of the year.
In its in-depth real estate investment forecast for the first three months of 2012, the organisation pointed out foreign investors are the driving force behind property transactions in the UK, with such purchasers buying assets worth GBP 1.3 billion more than the units they disposed of in the first quarter of the year. They were particularly active in the West End office sector, where overseas buyers accounted for 46 per cent of the value of all the deals concluded between January and March. Colliers revealed transactions in the office market totalled GBP 3.2 billion - up from the GBP 2 billion recorded during the same period in 2011.
- Monday 16 April 2012