Brexit uncertainty and the threat of inflation impacting on consumer spending means that the outlook for the UK commercial property investment market over the next three to six months is Unsettled, according to Birmingham-based specialist real estate asset management company, Blue Marble Asset Management (Blue Marble).
In the Summer 2017 Edition of the Blue Marble Barometer, the quarterly forecast of the UK commercial property investment market, Blue Marble says that activity in the commercial property investment market continues to be buoyant, with a steady, if not strong, performance.
Blue Marble Chief Executive Tim Matthews says: “As we now head into H2, the commercial property market appears to have held up well against the recent political and economic uncertainties.
“This most likely reflects investor sentiment towards commercial property which is viewed as a relatively low risk, high performing investment sector when considered in relation to the prevailing low interest rate economy which seems set to continue at least in the short to medium term.
“However, the possibility remains that future demand for commercial property may fall if inflation continues to outstrip pay increases, squeezing incomes and impacting on consumer spending, and if Brexit uncertainty puts a hold on businesses’ plans for growth.”
According to Mr Matthews, despite continued strong demand from investors for commercial property, yields appear to have largely stabilised.
He says: “Although pricing is generally more expensive than it was three to four years ago, the current level of pricing has become consolidated and likely now to only be significantly affected by a swing in the general economic cycle.
“As pricing is generally more stable, or at least increasing at a slower rate, there is more appetite among vendors and their agents to do off market deals, and this has been reflected in the number of such opportunities which have been made available to Blue Marble and its clients.”