Read more articles in: Blog, Carl Jones, Property

Commercial real estate opportunities as the market recovers

The commercial real estate market is showing strong signs of recovery after enduring a challenging two-year period that has seen high interest rates and economic uncertainty.

With a resurgence in deal volumes and property values, the UK is now outpacing the rest of Europe in its recovery, presenting both opportunities and challenges for investors and owner-occupiers.

The state of the market

Recent data indicates that the UK’s commercial real estate market has rebounded more quickly than those in other major European countries such as Germany and France.

In the first half of 2024 alone, property values in the UK rose by 1.4 per cent compared with the one per cent average increase seen across the continent.

Stronger economic prospects have strengthened this recovery, as well as hopes for political stability following the general election, and rising rents.

However, this recovery is not consistent across all sectors.

Warehouses, residential properties, and hotels have led the way, while office spaces continue to struggle.

Opportunities for investors and owner-occupiers

For investors and businesses looking to purchase or sell commercial property, this period of recovery presents several opportunities.

The increase in property values and transaction volumes signals a more positive environment for both buyers and sellers.

For those considering acquiring freehold or leasehold premises, whether for investment or owner occupation, this could be an opportune time to act.

However, it is important to approach the market with a clear strategy.

The uneven recovery across different property sectors means that some investments are more likely to produce positive returns than others.

For example, the warehouse sector has shown resilience and growth, making it an attractive option for investors.

On the other hand, those interested in office spaces may need to exercise caution and thoroughly assess the long-term viability of such investments.

Challenges in a recovering market

Despite the positive signs, the UK’s commercial real estate market is not without its challenges.

High interest rates, although slightly reduced following the Bank of England’s recent rate cut, remain a significant factor.

These rates can impact the cost of financing property purchases, potentially limiting the scope of investments.

Additionally, the market’s recovery, while promising, is still in its early stages and could be fragile.

Political developments and changes in the economy could influence the trajectory of this recovery.

If you’re considering a commercial property transaction, our team are here to help.

From conducting thorough due diligence to drafting and negotiating contracts, our services are designed to safeguard your interests in a recovering market. Contact us today.

Carl Jones

Managing Director

I qualified as a Solicitor having completed my training with Mander Hadley in 1992 and am a member of the Law Society Property Section and The Warwickshire Law Society.