Savills forecasts that eight asset classes in the UK property market are set to achieve annualised returns exceeding 8% for 2024.
This includes buy-to-let in the North West, London industrial properties, and retail warehouses, which are expected to be the top performers, with annualised investment returns between 8.5% and 9.2% from 2024-2028.
The upcoming year is seen as an opportune time for commercial investors, as retail, industrial, and office spaces are projected to be more affordable. The private rented sector’s challenges are likely to prompt institutional landlords to focus more on Built to Rent and Purpose Built Student Accommodation.
Farmland is also identified as a key area, expected to contribute significantly to net zero initiatives. Demand for prime arable land, primarily for food production, is anticipated to remain high, influenced by global events and environmental concerns.
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Richard Merryweather, Savills joint head of UK investment, highlights the positive shift in the market: “The factors that drove falls in UK property values and transaction levels over the last two years are expected to improve in 2024. There will be significant opportunity – especially in the commercial and residential spaces – for investors to buy at the bottom of the market.”
In 2024, investment focus is expected to shift to asset-specific basics rather than sector-wide trends. Strategic logistics projects, prime and green office spaces, and certain retail market segments are identified as areas with potential for better than average rental growth. The residential market is also expected to recover, with prospects for growth in mainstream house prices by 2025.
Read about the UK Housing Market via our Specialist Residential & Buy to Let Division
By Ryan Fowler
Source: The Intermediary