Commercial property market shows signs of recovery

News Article

Latest figures have revealed that commercial investment in the UK rose by 42 per cent in June, with the commercial property yield remaining stable with signs of recovery in the market.

In total, commercial investment rose to £1.3 billion in June, up from £755 million in May, with experts stating that the yield on commercial properties may solidify in key areas, with this being a typical sign of recovery in the commercial property market, as investors return to key sectors.

The commercial property sector has been significantly impacted by the coronavirus pandemic, with just 48 per cent of retail rents being collected since the June rent quarter day, according to the latest findings.

The retail sector felt the impact of the lockdown measures, with many being forced to close in March, but with lockdown measures now easing, many are re-opening and beginning to assess how their business has been impacted by the pandemic.

However, office and industrial properties have shown an improvement in resilience, with 65 per cent of rent being collected since the June rent quarter day, with all sectors of the commercial property market now showing improvement since the March rent quarter day.

Tom Wallace, Chief Executive of Re-Leased, said: “The rate of rent collection for the June quarter has been steadily strengthening over the past three weeks and the latest data shows that it has stabilised when compared to the same point in the cycle for March. It is very encouraging to see all asset types are now trending upwards compared to the last quarter.

“The easing of lockdown has meant more people are spending on the high street and getting back to the office, and this has restored some confidence.”

Carey Jacobs, a Partner with Palmers and leading the Commercial Property team there, said: “These latest figures show the prospects of recovery for the sector after a number of testing months financially for both landlords and tenants.

“The last few months have seen many landlords and tenants changing and re-gearing their lease agreements for the preservation of their current and future business relationships and the coming months will inevitably see more of that.

“This time has been one of the most challenging for all of them.   It is important for both parties to seek expert legal advice right at the start of any renegotiation process to ensure that their best interests are protected.”

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