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Commercial property market expected to recover in 2013


07/01/2013

By Daniel Hunter

2013 will mark the bottom of the UK commercial property market, according to the latest real estate predictions from Deloitte.

While it is expected that recovery will not be evident until later in the year, the downward trend in commercial capital values should halt as investors widen their focus outside of core markets.

The findings go someway to support the findings of the Halifax, who predicted that the housing market will remain fairly stable in the coming year.

Anthony Duggan, partner and head of real estate research at Deloitte, said. “Our prediction that we’ll reach the bottom of the market this year could be seen as heroic given the uncertainties in the global, European and UK economies but we believe there are enough compelling reasons to support the idea and expect that investors will increasingly be looking for opportunities outside the narrow focus on prime property we have seen most concentrate on over the last few years.”

Andy Rothery, head of Deloitte Real Estate, said: “Along with the utilisation of alternative lending streams, we expect to see the UK commercial and residential markets boosted by more than £20bn of investment coming from overseas in 2013. The inflow of foreign capital buying real estate is set to exceed that recorded in 2012; coming from both established players and more new entrants. Many overseas investors are looking for stable, income producing assets with bond-like characteristics. The UK is well placed to meet such needs and we expect that the appeal of the real estate to overseas capital will remain.”

In terms of construction activity, the report predicts that while activity will remain low across the UK, it will be supported by development driven from the higher education sector. Duggan added: “Public sector funding is supporting the development of new facilities, other universities are... continued on page two >

 

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