The commercial property sector has seen a slump as the number of deals in the market has fallen to its lowest level in ten years, but could things be set to change?
Deals in the last quarter of 2022 were the lowest in a quarter since 2010. Only £7 billion of deals were transacted in the last three months of last year.
This contrasts sharply with £21 billion in the first quarter, £17 billion in the second quarter and £11bn in the third.
Prices in the sector have also fallen by over 15 per cent according to property experts CBRE.
The downturn has been attributed to several factors, including rising interest rates, which have seen borrowing made less attractive to investors.
While the sector started 2022 on a high as foreign investors returned to the market after the lifting of Covid-19 restrictions, this was soon dampened by the Russian invasion of Ukraine and renewed worldwide economic uncertainty.
Later in the year, this was compounded by the fallout from the short-lived Truss government and Chancellor, Kwasi Kwarteng’s Autumn statement which sent shock waves through the UK economy.
At the moment, prospects for the commercial property market remain quite flat, as many businesses cut back on costs, rather than seek out new premises.
However, this suppression in activity in the market means that prices have fallen, which may present an opportunity to purchasers and investors looking to snap up a deal.
If you are looking for advice on selling, purchasing or leasing commercial premises, please speak to our experienced team today.