Property investors are optimistic about the UK market – Mortgage Finance Gazette

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This is according to independent research carried out on behalf of real estate expert Handelsbanken.

The study shows that six in 10 are ready to acquire more properties in the coming year and of these, more than half plan to diversify into new sectors with offices (43%) attracting the most interest as investors look to take advantage of depressed valuations. . Only 14% expect to sell some or all of their properties.

The vast majority (92%) expect to see a rebound in valuations, with London and the South East cited as the most attractive regions.

The Handelsbanken Professional Owners Survey is a national study among large UK investors with an average of 29 properties worth around £14m each.

More than half (57%) of those looking to buy more property also plan to diversify into new sectors, with offices (43%) attracting the most interest as investors seek to take advantage of depressed valuations.

The vast majority of respondents (92%) expect the value of their portfolio to increase in the next 12 months, with 39% predicting it will grow by more than 20%. Only 8% think that, broadly speaking, it will stay the same.

Handelsbanken chief economist James Sproule says the bottoming out in commercial property prices in the first quarter of 2023 corresponds with reasonably positive sentiment expressed towards the sector in this survey.

“Commercial property values ​​experienced a major correction in the second half of 2022 as a direct impact of the higher interest rate environment. Median retail property prices were down 15%, office prices were also down 15%, and industrial unit prices were down 25%.”

“In addition, there are ongoing considerations about post-pandemic employment practices and retail habits that, until further resolved, will weigh on commercial property valuations.”