Following the UK’s decision to leave the EU and a long Summer break, the outlook for the UK commercial property investment market over the next three to six months has become unsettled, as a three tier commercial property market has emerged, according to Birmingham-based specialist real estate asset management company, Blue Marble Asset Management (Blue Marble).
In the Autumn Edition of the Blue Marble Barometer, the quarterly forecast of the UK commercial property investment market, Blue Marble says that there are great differences in the reactions of Institutions, Property Companies and Private Investors to the Brexit process, with little evidence of post-Brexit price reductions, albeit in a quiet market.
Blue Marble Chief Executive Tim Matthews says: “Buoyed by increased consumer confidence, post-Brexit activity by private investors generally appears to be undiminished. Commercial and residential auctions continue to achieve very high sales rates and smaller lot sizes – £2 million and below – typically sell very well with competing interest in good quality product.
“Property Companies seem to be split between those adopting a ‘wait and see’ approach and those who have been seeking opportunistic acquisitions, while Institutions remain very cautious. Institutional investors will be under pressure to re-commence active investment, particularly as August’s reduction in base rate will impact on pension returns for which property will remain an attractive investment market.”
Overall, Mr Matthews believes that the commercial property market appears to have weathered the post Brexit storm relatively well so far.
“He continues: “Despite a more positive air of expectation among investment agents, that the market will soon return to ‘normal’, we are still comparatively early in the Brexit process, and in the weeks and months ahead there will undoubtedly be both positives and negatives which will affect investor and market confidence.”
Blue Marble remains active in the market with a number of acquisitions. In the last month (September 2016) it acquired a 65,000 sq ft distribution warehouse in Coventry and a 23,000 sq ft industrial unit in Glasshoughton, West Yorkshire, both in off market deals. It also continues to work actively with its investor clients to optimise returns on their investments. Also in the last month, it successfully negotiated new leases with tenants at a 20,000 sq ft industrial unit in Seaham, County Durham, and at a 13,500 sq ft industrial unit in Nottingham.
