Quarterly Review: Q1 2022
Global economic conditions have worsened as a result of the ongoing war in Ukraine. Higher commodity prices have been a key factor driving inflation to new highs in recent months, forcing central banks to increase rates faster to curb inflationary pressures.
Data shows that the UK commercial property market maintained momentum in Q1. The industrial sector continued to be the driving force, while other sectors also showed improvement.
Despite a dip in London office occupier activity from Q4 levels, Q1 leasing was on par with historical first quarter activity, but the high levels of new completions due over the next year or two may pose an upside risk to vacancy. In the industrial market, regional industrial take-up is outpacing that of the capital and the South East.
Regional office markets had a more subdued start to the year. Regional occupier demand fell in Q1 and even more so in the South East. But regional industrial activity, especially in the East Midlands remained strong.
Investment activity rose to its highest first quarter level since 2015. Within that figure, Central London office investment continued to rise, but investment in the regional office markets came in lower. Industrial and retail investment reached Q4 2021 levels, suggesting a strong start to the year for those sectors. But alternative sectors attracted the most investment in Q1.