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Robust figures for commercial property market

Is now the time to invest?

Commercial property investment volumes reached £31.4bn at the end of July, according to the most recent UK Commercial Market in Minutes report from Savills. This was 32% above the same period in 2020 and 4% higher than the five-year average.

Savills also noted a promising rise in the three-month rolling total for investment volumes. The May-July 2021 reading of £16.1bn was a 38% increase on the previous three-month period. Industrial assets received the highest quantum of investment for the period measured. At £9.7bn, this equated to 31% of total investment, above its share (14%) in 2018. However, total investment for industrial assets remained 7% below the same period in 2018. Likewise, regional office investment volumes were 40% up on 2020 but 23% below their 2018 level.

Affordable Workspaces

An interesting trend highlighted in the report is the shifting pattern of affordable workspaces. Traditionally, cheaper fringe space has helped generate economic growth by providing space for new entrepreneurs and creatives. Over the last decade, however, the pattern has somewhat flipped. In London, office rents have risen sharply in cheaper locations; 53% in the fringe compared to 29% in the city core. As a result, the gap between core and fringe rents (previously 19%) has vanished. Indeed, by the end of 2020, fringe locations had nudged slightly ahead.

Perhaps its time to make some property investment decisions?