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Gloucestershire Business News

UK commercial investment volumes set to hit £50 billion by year end

Commercial real estate investment volumes stood at £42 billion at the start of October 2021, according to Savills.

The business said this put the market on track to almost certainly exceed the £50 billion mark by the end of the year.

Investment in the industrial sector have already reached £12 billion, accounting for 29 per cent of the total market, its highest proportion ever, and overtaking the previous annual record of £10.9 billion with three months of the year still remaining.

Savills all-sector UK prime average commercial property yield fell by a further five basis points in September to 5.04 per cent, the lowest level since the start of the Covid-19 pandemic. The firm said it expects further compression before the year is over due to further yield compression expected in the food-store and retail warehouse (restricted) sectors.

Richard Merryweather, joint head of UK investment at Savills, said: "It's almost a certainty that we'll have seen over £50 billion of assets trade in the UK by before the year is out, putting the market well ahead of 2020 when approximately £46.8 billion was transacted, and approaching 2019's total when we saw £53.6 billion.

"Whilst the industrial sector continues to grab the headlines, we now have a market where there is more investor demand in all sectors."

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