{"id":5186,"date":"2022-03-28T15:30:14","date_gmt":"2022-03-28T14:30:14","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/?p=5186"},"modified":"2022-03-28T15:30:16","modified_gmt":"2022-03-28T14:30:16","slug":"commercial-property-market-review-march-2022","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/03\/28\/commercial-property-market-review-march-2022\/","title":{"rendered":"Commercial Property Market Review \u2013 March 2022"},"content":{"rendered":"
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Prime space snapped\nup by legal firms<\/strong><\/p>\n<\/div>\n\n

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More than one million sq. ft of Grade A office space was\ntaken up by the legal sector in 2021, highlighting the importance of the \u2018best\u2019\nspace in the post-pandemic landscape.<\/strong><\/p>\n<\/div>\n\n

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London\u2019s resilient legal sector has enjoyed strong revenue\nand increased headcount over the last year, which has driven demand for office\nspace. The sector\u2019s 2021 office take-up represents the strongest leasing\nactivity of prime space for law firms on record.<\/p>\n<\/div>\n\n

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International law firms have committed to the UK, with many\nchoosing London as their European headquarters. Notable deals include two by\nAmerican multinationals; Latham & Watkins, the second highest grossing law\nfirm in the world, acquired 200,000 sq. ft at 1 Leadenhall EC3, while Baker\nMcKenzie, the fourth largest by revenue, took 152,690 sq. ft at 280 Bishopsgate\nEC2.<\/p>\n<\/div>\n\n

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Analysts expect the sector to acquire more of the prime\nspace over the coming years. According to Savills, between 2022 and 2026, there\nare over 5.3m sq. ft of lease events within the legal sector in the City of\nLondon, of which 1.8m sq. ft have re-geared or committed to new office space.<\/p>\n<\/div>\n\n

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Impact of Ukraine\ncrisis on commercial property <\/strong><\/p>\n<\/div>\n\n

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Russia\u2019s invasion of Ukraine has horrified people around\nthe world and shaken markets and financial systems. What impact will it have on\ncommercial property in the UK?<\/strong><\/p>\n<\/div>\n\n

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Directly, analysts think the impact will be limited. Russian\ninvestors are not major players in the UK commercial market, accounting for\nonly 0.3% of purchases since 2015, according to Property Market Analysis LLP.<\/p>\n<\/div>\n\n

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One view is that the Ukraine crisis might shift investor\ndemand away from real estate in central Europe, which could benefit markets\nperceived to be safe havens, such as the UK and Switzerland.<\/p>\n<\/div>\n\n

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Indirectly, however, the invasion could have a greater\nimpact. Although Russia\u2019s share of global gross domestic product (GDP) is only\n1.7%, the country is a major energy producer. Since the start of the invasion,\nprices across a range of commodities, including oil and gas, have increased\nsharply.<\/p>\n<\/div>\n\n

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Legal & General expect real estate impacts to become\napparent in the longer term. They note two likely effects, both relating to\nenergy and the green transition; a greater focus from occupiers on energy\nconsumption in buildings and more attention paid by governments to energy\nsecurity.<\/p>\n<\/div>\n\n

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Yields back at pre-pandemic\nlevels <\/strong><\/p>\n<\/div>\n\n

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The positive investment trend of Q4 2021 has spilled into\n2022, according to the latest Savills Market in Minutes, with commercial\nproperty investment totalling \u00a36.9bn in January and February, 35% above the\nsame period a year earlier. <\/strong><\/p>\n<\/div>\n\n

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The UK average prime yield is now 4.84%, a level not seen\nsince October 2019. The Savills report expects positive sentiment and yield\nhardening to continue in half of the sectors it monitors. Further downward\npressure is expected in prime logistics, high street retail and shopping centres,\nwith repurposing opportunities especially likely for shopping centres off the\nback of prime demand.<\/p>\n<\/div>\n\n

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The return of larger deals, noted in Q4 2021, also continues: two assets over \u00a3100m were traded in December. In contrast, no deals over \u00a3100m were made in the whole of 2020.<\/p>\n<\/div>\n\n

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

Prime space snapped up by legal firms More than one million sq. ft of Grade A office space was taken up by the legal sector in 2021, highlighting the importance of the \u2018best\u2019 space in the post-pandemic landscape. London\u2019s resilient legal sector has enjoyed strong revenue and increased headcount over the last year, which has […]<\/p>\n","protected":false},"author":12,"featured_media":5188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,36],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5186"}],"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=5186"}],"version-history":[{"count":3,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5186\/revisions"}],"predecessor-version":[{"id":5191,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5186\/revisions\/5191"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/5188"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=5186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=5186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=5186"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=5186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}