Summary Review, 2013: What a Difference a Year Makes
As we entered 2013, fears of a “double dip” recession in the UK, a plummet from the “fiscal cliff” in the US and the crisis in the Eurozone weighed heavily on the minds of investors. Against this backdrop it was very difficult to be optimistic about the year ahead.
12 months on, however, and the stage is set for a period of strong performance from UK commercial property. With the market having picked up significant momentum towards the end of 2013, overall sentiment is considerably more positive than that of the past several years.
This turnaround in the UK market is perhaps best summarised by the 12-month total return high of 2.1% in December (according to data from IPD), reflecting a 1.5% growth in property values; the highest level we have seen since March 2010. A strong December also meant that the annual return for UK commercial real estate was 10.9%, again reflecting the best performance we have seen since 2010.
According to a strong consensus of commentators and those involved in the property sector, commercial property will go on to deliver strong returns in 2014.