Strong Commercial Property Investment Performance Will Continue into 2018

The commercial property investment market recorded its second best annual performance in 18 years, with total returns for 2017 standing at 11.8%*, with the weight of private equity still resulting in competitive demand for good quality assets, according to Birmingham-based specialist real estate asset management company, Blue Marble Asset Management (Blue Marble).

In the Winter 2018 Edition of the Blue Marble Barometer, the quarterly forecast of the UK commercial property investment market, Blue Marble says that activity in the commercial property investment market in 2018 appears to be carrying on where it left off in 2017.

Blue Marble Chief Executive Tim Matthews says: “Because this appetite to invest does not appear to be impacted (yet) by global, political and economic events, and we forecast that this trend will continue into 2018, the outlook for the UK commercial property investment market over the next three to six months has changed to Fair.

“January 2018 has already witnessed examples of strong demand for commercial property investments, particularly within the industrial sector. Future performance of the investment market will be closely aligned with occupier demand and rental value growth.

“In this respect, although there remains a question mark over consumer confidence, with wage growth failing to keep up with inflation, and therefore having a negative impact on consumer spending, there are a number of reports of strong economic growth forecast in 2018 reflecting strong performance in the United States, China and Europe which all show increased activity.

“The fact that the UK economy will benefit from the strong global economic performance, may also cushion the potential impact of Brexit.”

The industrial sector remained the star performer in 2017, with total returns in 2017 of 21%, driven by a December return of 2.7%, comprising 2.3% capital value growth and 0.7% rental value growth. The total returns from the office sector (9.8%) and the retail sector (8.6%) were comparatively modest, but still above the long-term average.

The Blue Marble Barometer is a quarterly forecast of the UK commercial property investment market based on current data and the direct market experience of Blue Marble Asset Management in acquiring, disposing of, and managing commercial and mixed use properties across the UK on behalf of its clients. A copy of the current Barometer is available from www.bmassetmanagement.co.uk/news.  The next Barometer will be published in Spring 2018.

Based in Birmingham, Blue Marble Asset Management is a real estate asset management specialist which presently has more than £100 million of property assets under management. It works for a select range of clients including investment businesses, high net worth individuals, trusts and family offices.  Its business is based on taking a holistic view of each of its property investments.

Further information about Blue Marble Asset Management is available by contacting the company on tel. 0121 272 4949 or email. tmatthews@bmassetmanagement.co.uk or via www.bmassetmanagement.co.uk.

*All statistics from CBRE’s Monthly Index.