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Commercial property investment falls by -73%

by | Sep 19, 2023

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Market analysis by the debt advisory specialists, Sirius Property Finance, reveals that commercial property transactions are down -67% while total transaction values have fallen by -73%. 

Sirius Property Finance has looked at the volume, total value, and resulting average value of commercial property transactions in the UK over the last six months, and compared the numbers to those from the six months prior. 

The data reveals a struggling commercial sector with just 281 transitions in the past six months marking a -67% reduction compared to the previous six months. 

 
 

Office space transactions have seen the greatest decline, falling by -75%. Retail and leisure transactions are down -68%, and industrial transactions have fallen by -57%. 

The total value of commercial transactions in the past six months stands at £3.7 billion which is -73% below the previous six months. 

The total value of office transactions is down -85%, industrial is down -67%, and retail and industrial is down -67%. 

 

But just as the picture is starting to look terribly bleak for the commercial sector, a silver lining appears when analysing the average value of each individual transaction. 

In the past six months, the average commercial transaction has valued £13 million. This is -20% lower than the previous six months.

Both office (-39%) and industrial (-22%) have seen their average values fall, but the retail and leisure space has enjoyed a somewhat unexpected rise of 20%. 

 
 

This has been driven by one sub-sector of the retail and leisure space, unit shops, reporting a remarkable increase of 138% in the past six months to hit £23.1 million.

However, the other areas of retail haven’t fared as well, with leisure (-31%), shopping centres (-30%), and retail warehouses (-3%) all seeing declines in average transaction value. 

Managing Director of Sirius Property Finance, Nicholas Christofi, commented: “There’s little ambiguity in these numbers, the commercial market is enduring a difficult period as a result of the UK’s wider economic struggles.

 
 

“But there’s a good chance that these recent declines are also the result of seasonal influences. The summer is a quiet time for the property market in general, so this may be causing more drastic declines that we’ve previously seen. 

“With the arrival of autumn, which is a real period of boom for the market, we’re hopeful that the numbers will start to show improvement, especially if the economy continues to show signs of recovery as it has recently been.”

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