A new market analysis by Sirius Property Finance clearly shows the impact the current global economic turmoil is having on the UK. Britain’s commercial property sector has seen just 281 transactions completed in the past six months, which is a fall of -73% compared to the previous six months.
In recent months, we’ve highlighted the problems facing the global commercial property sector, with some economic experts likening it to a ticking time bomb. The underlying problems causing the negativity extends far and wide, and the UK is not immune from them, which can be seen in a market analysis by the debt advisory specialist Sirius Property Finance
The Sirius market analysis has revealed that UK commercial property transactions are down -67% while total transaction values have fallen by -73%. To obtain the data, the firm looked at the volume, total value, and resulting average value of commercial property transactions over the last six months and compared the numbers to those from the six months prior.
Their research reveals that the commercial property sector is clearly struggling, with just 281 transitions in the past six months, which marks a -67% reduction compared to the previous six months. Some of the areas facing the most significant headwinds are commercial office space, with transaction levels down -75%, closely followed by leisure transactions down -68%, and industrial transactions down -57%.
The total value of commercial transactions in the past six months stands at £3.7 billion -73% below the previous six months. The total value of office transactions is down -85%, industrial is down -67%, and retail and industrial is down -67%.
However, although the data paints a somewhat bleak picture of the commercial property sector, some positive glimpses are revealed when analysing each transaction’s average value.
Both office (-39%) and industrial (-22%) have seen their average values fall, but the retail and leisure space has enjoyed a somewhat unexpected rise of 20%. This has been driven by one sub-sector of the retail and leisure space, unit shops, reporting a remarkable increase of 138% in the past six months to hit £23.1 million.
Other areas of retail are also shown to be struggling, with leisure (-31%), shopping centres (-30%), and retail warehouses (-3%) all seeing declines in average transaction value.
Nicholas Christofi, the Managing Director of Sirius Property Finance, said, “There’s little ambiguity in these numbers; the commercial market is enduring a difficult period as a result of the UK’s wider economic struggles.
But there’s a good chance that these recent declines are also the result of seasonal influences. The summer is a quiet time for the property market in general, so this may be causing more drastic declines than we’ve previously seen.
With the arrival of autumn, which is a real period of boom for the market, we’re hopeful that the numbers will start to show improvement, especially if the economy continues to show signs of recovery as it has recently been.”
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