Commercial Property Investment – annual uplift over 2…

Commercial property prices have shown strong year on year growth of as high as 21 per cent across some regions of Britain.

That’s the claim from Octane Capital, which has looked at both the current asking price and for sale stock levels of commercial property across each region of Britain, as well as how these two indicators of market health compare with a year ago. 

Previous research by Octane found that commercial construction lending is forecast to fall by 2.6 per cent in 2023 once the full-year figures are finalised, having already declined every year since 2014. But while the appetite for borrowing across the commercial sector may be dwindling, their latest research suggests that the sale of commercial property has not been subject to the same decline. 

In fact, the average asking price for commercial for sale stock currently stands at £622,825 across Britain, having seen a three per cent increase versus this time last year. 

However, in some regions, this positive price growth is far more notable, with the South West having seen a 21 per cent increase in commercial asking prices in the last year alone. Across Yorkshire and the Humber, and Wales, commercial asking prices are up 13 per cent annually, while the East of England, the South East and Scotland have also seen double-digit growth. 

There has also been an increase in commercial for stock reaching the market, with total stock increasing by one per cent across Britain in the last year. The South East has seen the level of available commercial stock climb by 12 per cent year on year.

While commercial asking prices across the capital have fallen by some five per cent year on year, London has seen the second largest increase in commercial stock levels, up eight per cent annually. 

Octane chief executive Jonathan Samuel explains: “Commercial construction borrowing has declined quite significantly over the last decade and neither the pandemic nor the more recent hike in interest rates will have helped boost the supply of new stock reaching the market. 

“However, it’s clear that the appetite for the purchase or commercial property is yet to diminish and we’ve seen positive annual movement both in terms of asking prices and for sale stock levels.

“The health of the commercial sector does differ depending on region, but it would appear that a freeze on interest rates is helping to boost commercial market confidence in the same way it has helped steady the residential sector.”