Though there have been many recent challenges, the commercial property market shows signs of being resilient, says an article published at iii.co.uk. Following the Brexit vote, funds that invest in UK commercial property lost value. Some investment funds suspending trading, but trading returned after a few months.
Emil Ahmed, writing for iii.co.uk, assessed the current state of the commercial property market and concluded that it is resilient. Though demand overall to rent commercial property fell by 2% in the second quarter of 2017, not all types of property have seen a decrease.
Thanks to competition from online retailers, there is a high demand for warehouse buildings, but less demand for brick-and-mortar shops. Office spaces are still in high demand, and in some areas the need for industrial units remains strong.
Faced with increased costs on buy-to-let properties, many landlords are looking to diversify their investments. They are attracted to commercial and semi-commercial property, because, depending on which area of the UK they invest in, rental yields can be higher than buy-to-let properties. Their switch to commercial property is helped by low interest rates on commercial mortgages.
Many financial experts are optimistic about the future of the commercial property market. Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors, recognises that the current commercial property market is flat, but noted:
“The underlying picture remains fairly resilient which is highlighted by the fact that medium-term rent expectations are still holding up particularly for prime space.”
