As 2018 really gets into gear, we can start to think about how commercial property will perform over the course of the next 12 months. And as experts in the property market in Norwich and Norfolk, it’s particularly interesting for us to think about how commercial property will perform in the region.
New analysis of the country’s property market by real estate firm JLL predicts that there will be around £55 billion of investment with returns of around 6.4%. This is slightly down on the £60 billion recorded over the course of 2017. The removal of capital gains tax exemption for overseas investors in the UK market has dealt something of a blow to the market, but it is hoped it won’t put off investors in the long run.
Jon Neale, head of UK research at JLL said:
‘Undoubtedly there will be investors who are dissuaded by the capital gains tax changes, but the change only aligns the UK with most other developed countries. In spite of this, the major reasons for investing in UK property remain, such as liquidity, lot sizes, landlord favourable leases, the strong economic and leasing fundamentals, and at present, relatively high yields and a weak currency.’
‘We also expect Korean investors to add weight to the broader push from Asia this year. While they have held back from adding to their UK exposure in the aftermath of the referendum, we expect a return in 2018, attracted by the market’s resilient performance and high pricing in other global markets.’
Further predictions for the year ahead also centre around a growing industrial and logistics centre and bigger deals for flexible office space. There will also be a growth in the mixed-use sector, as investors increasingly see themselves as providers of living space and social infrastructure. This will also be the year when many companies finalise their post-Brexit plans, which will offer some degree of security to the market.
As the year goes on, and the Brexit deals with the EU become clearer, we will have a better picture of how the commercial market will react both nationally and at a local level. If you’d like to know more about commercial property opportunities in the Norfolk region, then you can always come and have a chat with our team at Agile Property Partners. As experts in the local area and commercial investments, we are more than happy to talk shop.
Give us a ring on Norwich 01603 567804 or send us a message.
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