UK commercial property investment slumps

property investment

The industrial sectors saw the biggest drop, declining 55 per cent in only six months

The level of investment in UK commercial property has dropped across all sectors, according to the latest study.

Sirius Property Finance has evaluated commercial property investment in UK during the last six months, comparing it with the half-year prior to it.

The industrial sectors saw the biggest drop, declining 55 per cent in only six months. In the latest half year this sector has drawn £2.9bln, down from £6.9bln in the six months before that.

Office space investment has dropped by 55 per cent during the last six months, led by a 63 per cent decline in investment outside of central London. In spite of this, investment in office space is still the highest of any commercial property sector, at £3.8bln.

In the meantime, retail and leisure is 45 per cent lower, with a 75 per cent decline in shopping centre investment; closely followed by a 74 per cent drop in leisure investment.

In terms of the number of transactions, offices have seen the sharpest decline – falling 44 per cent over the UK and 64 per cent in central London. Retail and leisure transactions have fallen 40 per cent, driven by shop units dropping 47 per cent.

The average amount of money invested through each transaction has also dropped across the spectrum. The largest decline has come from the industrial sector, dropping 35 per cent from £22m to £14.3m.

The average investment into office space has declined by 19 per cent.

Kimberley Gates, head of corporate partnerships at Sirius Property Finance, states: It has been a hard half-year for the commercial sector. The sector has been struggling since the beginning of the covid crisis and the ensuing pull back from town and city centres, but now that extra economic unpredictability has been placed on top, the circumstances has aggravated.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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