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Next 5 years critical in shaping UK's commercial property market

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Specialist property investment is going to make up 20 per cent of the total commercial market in the UK by 2020, according to Knight Frank, an independent global property consultancy.

The property landscape is predicated to change because of a shift in UK's population demographics and other structural changes. The core specialist property sectors leading this trend are going to be healthcare, hotels, student property and automotive.

Factors such as the ageing population, an increase in student numbers, car sales growth and demand for high quality property are strengthening the hold of these specialist property sectors on the market.

Another highlight of the research by Knight Frank is that commercial investors are now taking a closer look at the development feasibility of their potential properties. They want more mileage from their investment, not only in the form of better returns, but also in terms of opportunities to diversify. This is a result of declining revenues from retail and offices.

The volume of specialist property transactions is predicted to be quite high in 2015.

Another growing area of the market is the Private Rented Sector (PRS). Currently, a small and informal industry, the PRS is worth more than GBP1.5 trillion. A Knight Frank survey indicated investors consider it a "sleeping giant", and believe it has the capacity to cope with more allocations to it.  

The study provides some key insights into 2015. According to Knight Frank, aged care homes are going to be top performers in the property market inviting local and foreign investment. The hotel market will grow, expanding into secondary locations with a space efficient design.

The student property market will have a promising year with at least 3 billion worth of transactions taking place. Finally, the automotive sector is forecasted to experience its best year ever in terms of volume.

Date Published: 18 Mar 2015
Category: General NewsUK

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