Will 2015 be a good year for UK commercial property?

Coutts believes it will be and the regions are better value than London

Will 2015 be a good year for UK commercial property?

Stephen Rees, head of Real Estate at Coutts bank, has argued forcefully that UK commercial property is an attractive investment.

In his regular blog he explained: “Investors should be cautious when yields are so low that there is limited scope for them to be compressed further through rising capital values. But overall, we still see UK commercial property as an attractive asset class – we concur with the recent RICS Commercial Property Market Survey suggesting that confidence in the UK economic outlook remains healthy, and that 2015 will be another good year for property.”

According to his figures transaction volumes for UK commercial property in the first quarter reached £19.1bn, which was second only to the record set in the previous three months. Transactions were helped by a surge in student accommodation and hotel deals. But favourable returns relative to other asset classes and the UK’s reputation as a safe haven also continued to boost demand as they have done for some time.

Demand from overseas investors remains strong, and they accounted for 42% of all UK transactions in 2014, according to Property Data. However, Rees advised: “…with valuations in London having risen sharply, the regions look like better value and we expect to see growing demand in these areas.”

 

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Categories: News, Property

About Author

Christopher Menon

Every Investor Editor Chris Menon is a financial journalist who has written regularly for national newspapers, magazines and websites about personal finance, with particular emphasis on investing.