With the closing of 2017, it has been a much stronger year for commercial property than many initially predicted. The economy has been surprisingly resilient, as well as having a record low for unemployment since 1975. Good consumer spending and rental occupations have also remained healthy.
At Roger Hannah & Co., as a team of experienced property agents, we are now looking forward to the New Year and what it could mean for our industry as a whole. So, what can be expected of the commercial property market in 2018?
Affordable Offices
Even outside of London, the demand for offices at affordable rates is on the up and up. The development of prime locations and international investment, in the face of cautious home investors as a result of economic and political uncertainty, means that more office space is on the rise. This is a trend which will seemingly remain strong throughout 2018.
The take-up of office space in Manchester, for example, was up throughout the year due to growth in the technology, media, and telecoms industries in the city. As England’s second city, there is no doubt that Manchester is a great choice for many start-up companies. The availability of affordable offices, especially in comparison to London, is no doubt a factor in this and will continue to be so throughout 2018.
Industrial Investment
Rising online purchases and consumer movement from the High Street will continue throughout 2018, leaving retail property uncertain but meaning a greater increase in returns for industrial sites.
Warehouse and packaging space are vital for a speedy internet shopping experience. At the moment, there is fierce competition as such spaces dwindles as a result of high competition. Further development of these types of commercial property for this growing online market will see high returns in the New Year as a result.
This is another area of commercial property which is likely to see a rise in overseas investment as well in 2018. Currently, overseas investors account for 28% of commercial property ownership. A number which will seemingly be on the rise for all sectors in 2018, but distribution warehouses in particular.
Political Uncertainty
Since June 23, 2016, and the outcome of the Brexit vote, people have been keenly aware of the uncertainty surrounding Britain, both politically and economically. Investment, occupational activity, and the like certainly seem to be much more cautious in the wake of these issues.
However, increased lending, new capital, and the global economic recovery have meant that positive growth has continued to happen with some momentum, even in spite of the politics. This offers an optimistic outlook for the 2018 commercial property market as a whole.
Overall, the market may also see a rise in secondary assets entering the market. Especially as people choose to hold onto their prime assets, or otherwise will choose to sell them extremely selectively, in order to take advantage of what will remain a liquid property market.
Here at Roger Hannah & Co we are always aware of the growing trends and endeavour to stay ahead of them for maximum benefit. Our specialist team is always prepared to help with your property needs. Simply call 0161 817 3399 or fill out the contact form for a confidential discussion regarding your property.