Cushman & Wakefield has presented its North East Property Outlook for 2018 and beyond. The presentation, held at the Tyneside Cinema in Newcastle city centre, revealed that the commercial property market in the North East remains in good health, despite the region’s disproportionate exposure to the negative effects of Brexit and the ongoing gloom on the high street.
Richard Turner, head of investment at Cushman & Wakefield’s Newcastle office was joined by Darren Yates, Head of Retail Research & Insight and Richard Pickering, head of futures strategy at Cushman & Wakefield to discuss market conditions and the opportunities and threats that lie ahead.
Economic and political uncertainty over the last year have made business planning extremely difficult, particularly for sectors like banking, the car industry and agriculture. However, last year also saw the second highest volume on record for commercial property investment with around £60billion worth of deals, driven largely by the industrial sector.
On the presentation, Yates said: “We are seeing a longer term trend which is the growth in industrial, leisure, alternatives and mixed-use, largely at the expense of retail. We’re also seeing an increasing shift towards mixed-use and a blurring of the traditional sectors.
“A more recent trend has been the slowdown in the shopping centre investment market, which reflects investor concerns around the structural changes going on in retail, particularly the secondary market.”
Pickering, Cushman & Wakefield’s Head of Futures Strategy, discussed future trends and the impact of digital disruption on the real estate industry.
He said: “There is significant change on the horizon for our industry, led by a shift to a digital economy, plummeting costs of technology and the emergence of new business models.
“Developers, investors and policy makers should plan for the impact of digital disruption in the same way as they plan for competition and near term market movements. With change there are always going to be winners and losers and the greater spread of potential outcomes provides opportunity for those willing to be proactive about the change ahead.”