Commercial property across the UK took a large hit earlier this year when the Brexit vote was delivered, with concerns about business prospects and the economy meaning that many investors and businesses looked to cool their activities in the market.
It has meant that the end of 2016 has been somewhat slow compared to previous years in the market, as might have been expected amid such uncertainty, but as we head towards the end of the year, are there reasons to be positive for 2017?
Markets like Liverpool, which were growing in prominence before the referendum took place, could see growth in the year ahead, and we take a look at just a few reasons for potential positivity in the year ahead.
Although this year hasn’t been the greatest overall for commercial property – in the wake of the Brexit vote there was a fall in activity in the market and large funds pulled out – moving forward, there are indicators that there are reasons to be hopeful.
For Liverpool in particular, the first quarter of this year, before the Brexit vote, had marked the third consecutive three-month period where there was a growth in activity.
This means that there is clearly a demand for this type of property moving forward, and that when the political dust settles, perhaps in 2017, investors are clearly there to put their money heavily into the sector.
However, even at this moment in time, there are still foreign investors around in relatively high numbers, which will give hope for the market moving forward.
According to data published by Lambert Smith Hampton, Quarter three of this year saw some £4.9 billion worth of UK commercial property investment come from foreign investors, which was the fastest quarter at any time this year.
It shows that there is an appetite for commercial property investment in the UK from across the world and areas that were performing well before the referendum, such as Liverpool, should continue to do well as a result.
On top of this, the other main reason to be positive about the future of Liverpool’s commercial market at the moment is the pushing of the entire Northern Powerhouse by the government, and how people are being encouraged to spread their investments not just across London, but into the northern regions.
The Powerhouse, which comprises a number of major cities, such as Manchester, Leeds, Sheffield and Liverpool, has been a growing concern for the government for some time, and it recently appointed George Osborne as the chair of the Northern Powerhouse Partnership, which is designed to promote the concept to businesses and investors alike.
When we combine this with the fact chancellor Philip Hammond has been trying to push the Powerhouse to investors from overseas in the past few months – mostly Chinese buyers – we see that there is a growing focus on this part of the country coming from Westminster, which can only be good for the growth of commercial property in all of these cities moving forward.