UK Commercial Property investment at all-time high in 2014

Nick Allan

Nick Allan

Business Leader recently attended DTZ’s ‘2015 Outlook’ event, which looks at the property market going forward.

The breakfast presentation held at The Bristol Hotel today revealed that UK commercial property investment reached an all-time high in 2014, with £54.9 billion transacted, with the increase driven by investment outside of London, which increased from £25.4bn in 2013 to £34.4bn in 2014.

Overseas investment continued to dominate in London, representing over 68% of transactions in 2014, but the real increase in overseas investment was again in the rest of the UK.

This increased significantly from a 28% share of the total in 2013 to 36% in 2014, driven by significant surges in investment from the US, China and, in particular, Europe.

Looking ahead, DTZ downplayed some perceived risks to UK property markets, including the impact of the general election and volatility in energy prices.

The DTZ event also revealed that whilst the main drivers of returns have been on the investment side, there has also been a significant turnaround in most occupier markets.

Office take-up in the key UK centres outside of central London was a record 5.7 million sq ft in 2014.

A record volume of grade B lettings reflected the extreme shortage of grade A stock.

However grade A pre-letting made a resurgence at the end of the year in response to a much-needed, albeit historically small, increase in the development pipeline.

Nick Allan, Senior Investment Director at DTZ in Bristol, comments: “We have seen a record breaking year for Bristol and have many reasons to be positive moving in to 2015.

“Firstly, public sector investment around infrastructure is finally starting to materialise with the Metrobus, Temple Gate, Electrification of the London line and the bridge construction at the Arena as well as the selection process of SMG/Live Nation as operator and with the Design Award due out next month.”