UK Capital Markets Review & Outlook – September 2020

In this report JLL’s Capital Markets team analyse current investment trends and assess the likely outlook for the remainder of the year.

September 25, 2020

The Covid-19 pandemic and resulting lockdown measures have dramatically impacted UK commercial real estate transactional activity in recent months, with investment volumes slowing to just £4.2bn in Q2, bringing the H1 total to £13.8bn. This represents a 34% reduction on the equivalent period last year and is 38% lower than the 10-year H1 average.

Despite the reduction in activity, which sectors have fared best, what were some of the biggest deals over the last six months, and what are the key themes that continue to drive investment decisions?

In this report JLL’s Capital Markets team analyse current investment trends and assess the likely outlook for the remainder of the year.  We also publish the results of our latest Investor Survey. Find out what the commercial real estate industry is expecting over the next 12 months, including views on the resilience and opportunities across each sector, on the characteristics most important in asset selection, and on the role of international capital.

Andrew Frost – Head of UK Capital Markets:

“The impacts of the Covid-19 pandemic have undoubtedly been severe, with a significant reduction in transactional activity over recent months.  Despite this, investors remain confident of the enduring strength of the UK market, and many will view this as an opportunity to deploy fresh capital with a renewed focus on long-term strategic ambitions.  Early indications suggest activity has already begun to pick up, and we are cautiously optimistic about the latter part of the year.”

Cameron Ramsey – UK Research & Strategy, Capital Markets

“The full economic impacts of lockdown are yet to be felt, while the Brexit risk is re-emerging and many investors are understandably cautious. We are expecting to see investment volumes of around £30bn for the year as a whole, and our central case is for further modest iterative increases next year. That said, upside risk remains – interest rates are low, liquidity is high and demand has been pent-up by two years of political and public health uncertainty, which may result in a sharper upturn in activity once the markets open fully

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