In the past year, the residential property market in the UK has been hailed for the way it bounced back from the lows that it dealt with in the years immediately following the financial downturn. Prices have now largely returned to pre-recession peaks, and in some areas they have even exceeded these record highs.
And now it seems that the commercial market is following suit. After months of reports that the investment levels have been on the rise, it has now been found that the number of sales taking place has hit the highest level since before the financial downturn.
According to figures released by HM Revenue & Customs, in the past 12 months, there were some 115,400 sales in the commercial property market. This marked an impressive six per cent jump when compared to one year prior.
Its report also showed just how well the market has rebounded from the trough it hit in the aftermath of the downturn. in 2008/2009, we saw the market fall from a relatively high point to seeing sales figures of just 92,900 as companies struggled and demand dwindled.
The fact that the sector now sees sales of 24 per cent higher than this is an encouragement, and we are now witnessing higher volumes of purchases than at any time since the financial downturn.
That doesn’t mean, of course, that there’s not still a long way to go for the market, and there definitely remains some room for improvement moving forward. In 2007 there were some 139,000 sales made in the commercial sector, which is still markedly higher than we’ve seen in the last year.
However, should business sentiment and the economy continue to grow in the way we’ve seen in the past few months, we could well be headed even closer to this all-time peak.
“Commercial property assets are proving increasingly attractive to investors looking for higher yields in an environment with record low interest rates and this is driving activity towards pre-credit crunch levels,” said Nick Marshall, principal at EMW.
“There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors.”