UK Commercial Property Values Continue to Rise

Posted by: Victor Pardis on 7th April 2014

Office and industrial property values both rose by 0.9 per cent from January whilst retail assets gained 0.2 per cent. Commercial property values first began to increase in May last year after seventeen straight months of losses.

 

Commercial property values across the UK are on the rise, particularly in London where office space is the most expensive in the world to rent. 

Image source: http://farm5.staticflickr.com/4097/4894787814_46f6f504f5.jpg

The reason behind the increase in commercial property prices

The increase in commercial property prices has been accelerating ever since the UK economy began to recover last year, following the economic recession that hit the country in 2008. It is not just London where growth is taking place either, with the value of commercial real estate beginning to experience increases further afield too.

Many analysts are stating that commercial property in the UK will deliver double digit returns for investors this year. The fact that there was a lag in building projects taking place during the recession has resulted in an increased demand in office and retail space as the UK transitions into the recovery stage.

Offices in premium areas of London, including the West End, are also experiencing strong interest from overseas investors and businesses. This is driving up their price so much that London has remained the most expensive place to rent office space in the world for the second consecutive year.

Tips for investing in commercial property

With commercial property prices on the increase, now is a great time to invest. But with so many different properties to choose from, it is important to identify your reason for investing, in order to help you make the right decision. Firstly you will need to establish why you are looking to buy a commercial property. Are you hoping to find somewhere for your business to occupy or are you looking to buy a property to lease out as a serviced office to other businesses?

It is also essential to set yourself a strict budget. Although you are likely to have a limit on how much you can afford to pay for a commercial property, it is likely that you will also have an idea of how much you are prepared to pay. If commercial property prices in central London are out of your budget, you may want to consider investing in some of the upcoming areas surrounding it, including Battersea, the Southbank and Shoreditch.

 

Whilst now is a great time to invest in commercial property, it is not a decision you should rush into. If your lease is up on the property you currently occupy, you could always consider operating from a serviced office whilst you make your decision. One of the great things about operating from a serviced office temporarily is that you will not have to commit to a lengthy contract. You can simply operate from the office for as long as you wish to. For more information about serviced offices and how they could benefit your business, get in touch with a member of our team today.

 

Image credits: Steve.Jackson