The pound’s reduced value has seen overseas demand for commercial property rise substantially, a new report has shown.
The Royal Institution of Charted Surveyors’ (Rics) quarterly commercial market survey revealed that, despite negative growth expectations for commercial property, investment enquiries remained positive during the fourth quarter of 2016.
Poor projections immediately after the vote to leave the European Union saw several top developers put projects on hold, while rent and valuations dropped in fear that the UK would become less investable.
But it appears as though interest in UK commercial property has not at all wavered. Demand increased for a second straight quarter with the growth in enquiries gaining momentum, as 21 per cent more respondents saw a rise in demand in Q4 up from 9 per cent more in Q3.
Meanwhile, 20 per cent more respondents saw a rise in demand in foreign investment enquiries, up from 7 per cent more seeing a rise in Q3.
Simon Rubinsohn, RICS Chief Economist, said: “The results for the Q4 survey suggest that the commercial property market is continuing to attract investor interest despite ongoing concerns about pricing in the capital and the prospects for the economy more generally. Indeed, the feedback we have received is consistent with a renewed appetite from overseas buyers for UK assets.
“Meanwhile the results for the occupier market highlight the resilience of the economy in the wake of the vote to leave the EU, but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers increasing go online to make their purchases.”