In 2017, commercial property transactions were worth more than £55bn according to real estate company Colliers International. The company expects sales to be slightly down in 2018, but still above £50bn.
Colliers has made a number of predictions about the commercial property market in 2018. One area Colliers expects to increase significantly is office space catering for flexible workers who do not want long-term lease commitments. Flexible offices allow people to rent desk space as and when they need it. WeWork is planning to increase its flexible office space to around 3.5 million square feet.
Retailers are expected to increase warehouse space to meet the forecast growth in online orders. There could be more mixed developments that provide both homes and warehouses.
The head of UK research at Colliers International, Mark Charlton, said:
“Property performance is likely to moderate in 2018 as pricing remains pressured and rental growth modest, but on the up-side, the market will become less volatile, offering attractive, stable returns for investors.”
He added that, because of the continuing weak pound, USA and Chinese property investors will still want to purchase British commercial property. Britain is seen as a safe place to invest in commercial property.
The Bank of England could raise their interest rates in 2018, but increases are likely to be marginal. Commercial property investors should be able to find commercial mortgages at reasonable interest rates to take advantage of the strong commercial property market in 2018.