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Predictions for the UK commercial property market in 2016

Last month the Chief Economist of Knight Frank, James Roberts, gave five predictions for the 2016 UK office market. While our previous blogs on this subject have examined three of these in some detail, Mr Roberts has put two new ideas up for discussion. What are the implications for commercial landlords if these predictions come true?

The predictions 

Mr Roberts suggests that 2016 will see a shift in the nationality of overseas buyers, with less activity from emerging markets like China, and more from America. The Financial Times (FT) partially supports this judgement, showing that Chinese investment is slowing down as more buyers sell up and take profits home.

Secondly, Mr Roberts predicts a rise in 'agile' office environments in which employees move away from their desks and into collaborative spaces like sofa areas and games rooms. The Guardian has previously reported on how innovative companies such as Apple and Google were the first to adopt this approach. Now an increasing number of employers are recognising the benefits of an agile work space in terms of both efficiency and workforce morale.

The implications

The anticipated rise in Canadian and American buyers eager to invest could result in intense competition, causing domestic purchasers to become displaced by foreign investors. Continued in-flow of capital from abroad can also be expected to keep property prices high.

While prediction one is connected to an uncertain bag of implications for commercial landlords, prediction two presents a clear innovation-related challenge. If 2016 does see a greater number of 'agile' offices, landlords should consider how their properties meet the increasing demands of discerning occupiers. Modernising property interiors could well be profitable for property owners in the long run. Managing Director of design firm Morgan Lovell, Ken Giannini, backs up this statement: "Buildings which offer a lifestyle to their occupiers, through the quality of shared spaces and amenities, increasingly have a competitive advantage".

Whatever 2016 brings for office market trends, landlords can make the most of the thriving climate and prepare for less certain times by working with ethical Enforcement Agents.  If you're a property owner who'd like to secure cash flows and eliminate commercial rent arrears, give us a call today.

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