The latest figures from estate agents Savills reveal that in January 2018, investment in commercial property in the UK rose by 66% to £4.2bn
In 2017, the total invested in UK property was £65.4bn which was 26% higher than in 2016.
The top investment sectors were industrial and office buildings. Investment in the industrial buildings was up 80% in the month.
Overseas investors represent nearly half of all commercial property investors, and Asians account for nearly a fifth of investors.
According to Savills, average rental yields for prime commercial property in January were 4.52%, which is 30 basis points below 2017’s levels.
The CEO of Savills, Mark Ridley, said:
“January’s volumes demonstrate that investors are still looking beyond Brexit and are happy to commit to the UK to secure prime property with secure income characteristics. Based upon current projections, driven by a downward shift in equivalent yields, we expect total returns for average UK commercial property to be around 7 percent this year.”
Savills believes that the effect of Brexit on the property market is minimal and should not affect the overall level of funds invested in commercial property during 2018.
The research shows that the UK is a strong centre for commercial property investment. There are many lenders with commercial mortgage products available to fund property purchases.
An increasing number of startup companies and established companies are expanding, which means hopes are high there should continue to be a healthy demand for commercial property.