{"id":14083,"date":"2023-04-27T11:53:29","date_gmt":"2023-04-27T10:53:29","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2023\/04\/27\/commercial-property-market-review-april-2023-2\/"},"modified":"2023-04-28T14:29:30","modified_gmt":"2023-04-28T13:29:30","slug":"commercial-property-market-review-april-2023-2","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2023\/04\/27\/commercial-property-market-review-april-2023-2\/","title":{"rendered":"Commercial Property Market Review – April 2023"},"content":{"rendered":"
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Investor confidence returns as pricing plateaus<\/strong><\/p>\n<\/div>\n\n

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UK commercial investment volumes totalled \u00a35.6bn in Q1 2023, according to a report from Savills, the second lowest quarterly volume since 2009.<\/strong><\/p>\n<\/div>\n\n

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Amidst a volatile and unpredictable economic backdrop, investment volumes were lower than any quarter except Q2 2020. The average Savills prime yield now stands at 5.57% after yields in industrial and regional offices moved inwards by 25 basis points.<\/p>\n<\/div>\n\n

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Inflation figures released by the Office for National Statistics (ONS) continue to remain high with the consumer price index (CPI) rising to 10.4% in February and only dropping to 10.1% in March. The report states that investors are now in \u2018wait and see\u2019<\/em> mode, with many experts predicting that investment volumes could trend upwards later in 2023, should a market recovery materialise.<\/p>\n<\/div>\n\n

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Commercial landlords at risk of non-compliance<\/strong><\/p>\n<\/div>\n\n

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One in every 20 square metres of commercial property space could be at risk of non-compliance with the Minimum Energy Efficiency Standards, according to a release by Knight Frank.<\/strong><\/p>\n<\/div>\n\n

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Since the start of April, all tenanted commercial property buildings across the UK have needed an energy performance certificate (EPC) rating of at least an E under the Minimum Energy Efficiency Standards (MEES).<\/p>\n<\/div>\n\n

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From the 5% of commercial property floorspace currently at risk, offices (7.5%) and retail (5%) have the most \u2018F\u2019 or \u2018G\u2019 grade space. Hotels (2%) are the least at risk, though some experts think this may be an underestimate given that many don\u2019t require EPC ratings until a sale process is executed.<\/p>\n<\/div>\n\n

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The stakes are high for landlords since buildings that fall short of the new standards could incur fines of up to \u00a3150,000.<\/p>\n<\/div>\n\n

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Higher vacancy rates for Scottish offices<\/strong><\/p>\n<\/div>\n\n

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Office vacancy in Scotland has risen to its highest level in seven years, according to CoStar Group, reaching 10.3% last month.<\/strong><\/p>\n<\/div>\n\n

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As occupiers continue to reassess their space needs, vacant office space has increased by 51% since the first lockdown. The amount of unoccupied office space now stands at 10.9m sq. ft across Scotland.<\/p>\n<\/div>\n\n

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A year ago, this was 9.2m sq. ft \u2013 and 7.2m sq. ft in March 2020. Since the pandemic began, net absorption of office space across Scotland has been negative.<\/p>\n<\/div>\n\n

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Grant Lonsdale from CoStar Group, commented, \u201cWhile the headline figures make for a sobering read, our data shows a mixed picture by building grade, age and location. Broadly speaking, firms are gravitating towards the newest and best offices, whether they are based in Edinburgh, Aberdeen, Stirling or elsewhere.\u201d<\/em><\/p>\n<\/div>\n\n

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London office moves on the up<\/strong><\/p>\n<\/div>\n\n

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In a turbulent market, 2022 saw the highest number of Central London office deals on record, according to the newly released London Moves report.<\/strong><\/p>\n<\/div>\n\n

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Some 590 leasing transactions took place across the year, driven by a 58% year-on-year increase in sub-25,000 sq. ft deals, the report notes. In contrast, larger 100,000+ sq. ft deals decreased from 15 in 2021 to 10 in 2022.<\/p>\n<\/div>\n\n

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New Central London occupiers increased to 63 in 2022 thanks in part to 33 relocating from outside Central London. \u201cCompanies have responded to the challenges of the past few years by focusing on what\u2019s right for their business\u201d<\/em> commented Ben Cullen, Head of Offices UK.<\/p>\n<\/div>\n\n

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All details are correct at the time of writing (20 April 2023)<\/strong><\/p>\n<\/div>\n\n

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It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.<\/em><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Investor confidence returns as pricing plateaus UK commercial investment volumes totalled \u00a35.6bn in Q1 2023, according to a report from Savills, the second lowest quarterly volume since 2009. Amidst a volatile and unpredictable economic backdrop, investment volumes were lower than any quarter except Q2 2020. The average Savills prime yield now stands at 5.57% after […]<\/p>\n","protected":false},"author":12,"featured_media":14085,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,36],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/14083"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=14083"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/14083\/revisions"}],"predecessor-version":[{"id":14087,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/14083\/revisions\/14087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/14085"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=14083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=14083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=14083"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=14083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}