As we wake up to headlines this morning confirming the UK economy is growing at its fastest rate since 2007 it was also interesting to see comments from the U.K.’s second largest property company. British Land has issued a trading statement today confirming renewed support for the UK commercial property market in line with the ongoing economic recovery. Perhaps one of the more interesting elements of the report is the fact that, while London remains the focal point of the UK commercial property market, international investment is now starting to spread into regional markets.
This will come as a welcome relief to the UK government amid concerns that the commercial property market was not responding to the ongoing economic recovery. While there is no doubt that relatively low interest rates are assisting investment in the UK real estate market there does also appear to be genuine demand.
Office space in London
While London has some of the most expensive office developments in the world, there is renewed demand for London office space which would seem to indicate a growing confidence in the UK economy and its recovery. This is an area of the UK economy which has been under pressure for some time amid concerns that companies were cutting back investment, putting expansion plans on hold amid forecasts that the euro crisis could last for decades.
Quote from PropertyForum.com : “The Select Property report entitled “The international investor’s guide to the UK property market” has cast a very interesting light on the habits of international investors with regards to UK real estate.”
It would be wrong to suggest that the euro issue has been fully resolved because there are fundamental problems which need to be addressed. The European Union basically needs to live within its means, reduce ongoing tax increases and all members need to be “singing from the same hymn sheet”. Only then will we see any real confidence in the euro going forward which will assist the European economy as a whole.
Demand for new retail outlets
Over the last couple of years headlines seemed to be predicting yet more issues for the UK high street with online transactions now reaching record levels. You could be forgiven for thinking that your traditional retail outlet was on the way out, high streets would continue to reduce in size and many of us would be forced to buy over the internet. However, British Land has confirmed renewed demand for retail outlets across the UK although yet again the main focus at the moment does seem to be on the London market.
As we see increased demand for office accommodation, not to mention retail outlets, this will breathe new life into the employment market which will then assist the economy going forward. Whether or not both domestic and commercial property markets in the UK have pushed too far ahead too quickly remains to be seen but there is no doubt that the economy is now back on a growth track.
While Vince Cable, a senior member of the coalition government, has today been talking down the ongoing recovery in the UK economy, many are sceptical about his motives. There is growing speculation that the Liberal Democrat MP is looking to secure himself a position in a potential Labour/Liberal Democrat coalition which could emerge after the 2015 general election. Would an MP really put his own ambitions ahead of the national economy?