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Experience Invest

UK Commercial Property Sees Record Year

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Hello and welcome back to the Experience Invest blog, where we bring you the latest UK property sector news. A record amount of money flowed into the UK’s commercial property sector in 2015.

Booming market

The latest survey from the Royal Institution of Chartered Surveyors (RICS) shows that confidence is strong in all UK commercial property sectors. Property Wire reported that compared to the previous quarter, 43% more surveyors saw a rise in demand for industrial space in the final quarter of 2015. Meanwhile, 29% said the same of UK office space while 26% more saw increased demand for retail property in the final three months of last year.

As such, 35% more chartered surveyors questioned projections that rents will rise across all UK commercial property sectors in the first quarter of 2016. This may be because new data from Lambert Smith Hampton found that UK commercial property returns measured 13% in 2015, although the firm added that as capital growth slows, this should fall to 9% this year.

Funds flowing

Financial news site The Wall Street Journal reported that the Lambert Smith Hampton study also found that a record £63.4 billion of investment flowed into UK commercial property in 2015. This is a rise of 4% on the year before and this record commercial property inflow was boosted by a 23% investment increase in the final three months of the year.

Alternative commercial property was the most successful asset class in 2015. Last year it saw £14.8 billion in investment, a 4% increase on 2014. Out of this total, £8.2 billion was invested in hotel and leisure assets, while £4.6 billion was devoted to Britain’s student accommodation sector. Also, foreign investment in the UK’s commercial property market rose by 9% in 2015, meaning international buyers now account for 50% of the country’ commercial property deals.

Commenting on this study, Lambert Smith Hampton CEO Ezra Nahome called 2015 a “stellar” year for UK commercial property. However, he said that “the prospects for further downward yield movement, particularly at the prime end of the market, are looking more limited now,” which is why the company expects returns to moderate to 9% this year.

Experience Invest

Experience Invest is a London-based independent property company specialising in residential investments, student property and care home investments. The company operates across the UK and internationally, and is regularly featured in the property news – see The Telegraph, on Yahoo Finance, and by Reuters for examples of recent articles.

Experience Invest works with a range of clients, from first time investors to high-net worth individuals, offering them unique access to properties not always available to individual investors.