Commercial property returns poised for 25 year high

A report from global real estate company M&G Real Estate has predicted that the UK Commercial property market could achieve returns of over 20% for 2014, the highest amount in 25 years.

Thanks to increased confidence and an increase in interest from both UK and international investors, the market is set for a highly successful year.

Commenting on the report, the head of research at M&G, Richard Gwilliam said: “The UK econmony and property market are experiencing rapid growth, leaving behind a period of difficulty that discouraged risk appetite across the board.”

Statistics released by NovaLoca earlier this year also revealed increased interest in commercial property, with a 60% increase in enquiries over the summer months. A report from Colliers also forecasted around 20% in returns, with the industrial market leading the way at 24%, followed by office and retail.

Earlier this year we spoke to several NovaLoca subscribers to get their take on the state of the UK commercial property market and many expressed that 2014 had been extremely positive so far.

Mike Owen of Owen Shipp said “confidence is back in the market and these are exciting times again”, while James Page of Page Hardy Harris said “There is a general air of confidence, which is a result of built up demand from companies that have survived and prospered during the downtimes.”

M&G’s report also highlighted that the increase in market activity could lead to a lack of supply in the future. As vacancies lower and rents grow, it is hoped that there will be an increased push for development.

Interestingly, secondary offices in the South East were seen to be outperforming the top level of space. This is a growing trend that we have seen from our subscribers on NovaLoca, with many stating that there is a lack of Grade A office space, leading occupiers to seek alternative space.

With the market enjoying a buoyant year, it seems there has never been a better time to buy or rent commercial property. NovaLoca has thousands of available listings, whether you are looking for an office, industrial unit, retail space, leisure or land.