The commercial property market in the UK is not immune to the events that are shaping the economy as a whole. Although the euro zone crisis is an ongoing source of concern for many investors and the domestic economy remains weak, there is still an underlying air of confidence and groups remain committed to investing in this sector.
Investors are interested in finding opportunities that will provide value over the long term instead of focusing on get-rich-quick schemes. A number of people who are familiar with current market conditions feel that it is now close to bottoming out.
The types of businesses that are most likely to invest in UK commercial property in the next three to six months are medium and large ones. The majority of businesses in this class are quite positive, with 70 per cent of those surveyed by Lloyds Bank Wholesale Banking and Markets stating they planned to increase their commitment to investing in commercial property and only 10 per cent looking to divest.
Businesses are planning to use their capital very selectively and will be managing their portfolios carefully during this period of slow economic growth. Over half small and medium to large sized business owners (64 and 63 per cent respectively) believe that values will remain at their current levels over the next six months, “despite an improvement in their portfolio performance.”
Fund managers see opportunities for growth and anticipate their holdings will grow by 9.52 per cent over the next six months. The proportion of fund managers willing to invest in the euro zone is expected to increase slightly from 50 per cent to 54 per cent.
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