The New Year is here and it is the time to review the past year and analyse the industry to foresee what is awaiting the commercial property industry. It is almost impossible to find any topic that does not mention Brexit and its potential impacts on economy, however the future is not looking dark for commercial property sector. As leading specialists in commercial property in Wimbledon, offering a full range of services including leasehold acquisitions, disposals and investment, we collected all the information you need in this field as well as some look into the trend forecasts of 2018.

 

What Will 2018 Bring for Commercial Property in Wimbledon and across London?

 

Even though there still is a great deal of uncertainty going around Brexit and all its bearings, day-to-day is seeming to continue unaffected until final decisions are made. According to Investor Chronicle, for the foreseeable future, the essentials in commercial property sector will remain favourable. Overseas investors looking to invest in commercial property in the UK (mainly in Wimbledon and London) do not seem to be affected from the uncertainty as well: The UK is attracting more than half of the Asian investment capital coming into Europe. The close second is Germany, which only sits at 12% of Asian capital.

In terms of the type of commercial property to attract, investors are continuing to be selective: Choosing the right type of commercial property is a deeply need-based factor, however, between 4 major types of commercial property, the ones that remain in high demand are office (such as standard office spaces and business parks) and industrial (such as industrial estates and warehouses) commercial properties.

This leaves retail (such as shops, shopping centres and department stores) and leisure (such as restaurants, pubs and hotels) properties to be the less favoured commercial property options. Next to property type preference, another trend that we will see within this year will be the location choices remaining within regional areas nearby the capital, London.

Located in the South West of London, Wimbledon is becoming a more and more popular for choice. Commercial properties in Wimbledon are surrounded with great transport links (District Line and National Rail Services) that allows commuters to travel to London within minutes while neighbouring many of the business world’s famous names who moved their premises to this area.

Another trend to take into consideration while reviewing 2018 commercial property forecasts is the change in consumer habits. The growth of the global phenomenon, online shopping (i.e. e-commerce) is ever lasting: In 2017, it reached $2.3 trillion and this number is expected to reach $4.5 trillion by the end of 2021. This only means one thing for commercial property sector: The demand for industrial warehouses will stay very high.

Overall, in 2018, commercial properties in Wimbledon and generally in the UK will retain its attraction thanks to the offering of strong returns and lower risk against other geographies.

As mentioned in a November 2017 Savills report, the majority of the key capitals will be deriving from non-domestic investors, mainly for:

– Urban Logistics: Rental growth is foreseen as a result of strong demands from tenants and high competition for other sites from other uses. According to Savills, the biggest growth will be inside the M25.

– Offices Spaces: Considering all the uncertainty awaiting; affordable office spaces in accessible locations such as Wimbledon and other commutable locations near London, will be in high demand.

The Savills report also mentioned that any commercial property investment that is branded as ‘core, prime or secure’ will keep on creating high-demand.

Overall, 2018 is going to be an exciting year for commercial property developments planned across the UK. Commercial properties in Wimbledon are going to continue to be in high demand for both investors and occupiers alike – thanks to great amenities, being only 17 minutes away from Central London’s London Waterloo Station and upcoming Heathrow Airport expansion and Crossrail 2 works.

Domestic investors are most probably going to remain more cautious regarding any involvement with commercial property investing, which can be explained via home bias and over estimating the effects of political uncertainty of Britain but this will give rise to foreign investments.

As suggested by Savills’ head of European commercial property research Matt Oakley, whether the income producing commercial asset is a warehouse or an office space, the factor that will attract investors will be the bond-type characteristics of the asset; lumped together as alternatives. He also adds, it will be ‘the year where alternatives will become mainstream’ so better keep up-to-date with ongoing developments and demands to make the most rewarding commercial property decisions.





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