30/07/2024
๐๐ ๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ข๐๐ฅ ๐๐ซ๐จ๐ฉ๐๐ซ๐ญ๐ฒ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ:
The UK commercial property market is set for a recovery, buoyed by significant liquidity and strategic investments. Savills' capital markets experts indicate that there is enough liquidity in the system to support a global real estate rebound, offering promising opportunities for UK commercial property investors.
๐๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐๐ง๐ ๐๐๐ซ๐ค๐๐ญ ๐๐จ๐ญ๐๐ง๐ญ๐ข๐๐ฅ
The market benefits from a considerable amount of "dry powder" in property funds, accumulated post-Covid-19 during a period of ultra-low interest rates. Globally, US institutions hold around US$3.6 trillion in low-risk money market funds, demonstrating the vast potential for reallocation into dynamic investments like commercial real estate.
๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐ญ๐ซ๐๐ญ๐๐ ๐ข๐๐ฌ ๐๐ง๐ ๐๐ฉ๐ฉ๐จ๐ซ๐ญ๐ฎ๐ง๐ข๐ญ๐ฒ ๐๐จ๐ฌ๐ญ๐ฌ
Savills highlights the opportunity cost of holding cash during market upturns. US money market funds delivered a total return of 5.5% since July last year, while those who moved funds into US equities saw returns exceeding 20%. This underscores the benefits of reallocating funds into real estate.
๐๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ ๐๐ง๐ ๐๐๐ซ๐ค๐๐ญ ๐๐ฒ๐ง๐๐ฆ๐ข๐๐ฌ
Rasheed Hassan of Savills notes that institutional investors remain committed to real estate, with allocations stabilising and potential market activity increasing as pent-up supply is released. Structural shifts in the global economy and increased deposits into major institutions like pension funds and sovereign wealth funds will support real estate investments.
๐๐๐ฆ๐จ๐ ๐ซ๐๐ฉ๐ก๐ข๐ ๐๐ง๐๐ฅ๐ฎ๐๐ง๐๐๐ฌ ๐๐ง๐ ๐๐๐ซ๐ ๐๐๐๐ญ๐จ๐ซ ๐๐ฉ๐ฉ๐จ๐ซ๐ญ๐ฎ๐ง๐ข๐ญ๐ข๐๐ฌ
The global ageing population is a key driver, with nearly 25% of the population now over 50. This demographic shift supports savings and investment, boosting demand for real estate. Additionally, the care sector offers significant value due to the rising need for healthcare and assisted living facilities, providing stable, long-term returns.
๐๐ฉ๐ญ๐ข๐ฆ๐ข๐ฌ๐ฆ ๐ข๐ง ๐๐๐ซ๐ค๐๐ญ ๐๐๐๐จ๐ฏ๐๐ซ๐ฒ
Oliver Salmon of Savills reports growing investor optimism, supported by stabilising property values and an improving macroeconomic environment. Central banks are easing monetary policy amid declining global inflationary pressures and accelerating economic growth.
For anyone considering investing in the UK commercial property sector, now is the time to explore these promising opportunities. Contact the Property Developer Hub to learn more and make informed investment decisions in this dynamic market.
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