The Courier & Advertiser (Fife Edition)
Investment property sector expected to gain momentum with rental and capital growth
During the first half of 2020 there were more retail failures than the whole of 2019
There will be many challenges for the property market as the country eases its way out of the coronavirus lockdown, but property is resilient and has come through many a crisis before. The commercial property sector is functioning, and it will continue to improve, although certain parts of the market will fare better than others. Investment property activity has improved across the country and this is expected to pick up momentum going forward, but will still be down significantly on 2019 figures at this year end. In the occupier markets, hospitality was first to be locked down and some of the last to be permitted to reopen. Operators are trading below full capacity due to restrictions imposed by government, and patrons will not return in the numbers experienced in normal conditions, as many remain cautious of the risks. Rents and values will be under pressure for the foreseeable future. The problems in the retail sector before the lockdown were well documented and a lengthy lockdown has been catastrophic for many. During the first half of 2020 there were more retail failures than the whole of 2019. It’s no coincidence that rent collection has been severely impacted and, as that becomes more difficult, more space will come to the market. Retail sales have rebounded, but a large proportion of the spending growth was online sales which continue to hinder the high street. In line with the hospitality sector, rents and values will remain under some pressure. In the office sector, the supply of good quality offices remains limited. It is envisaged values will hold up as businesses will continue to occupy office space, but perhaps differently – and going forward there may be more demand for home working and smaller satellite offices. Occupier demand in the industrial and logistics sectors is expected to remain resilient. Rental and capital growth is expected – in particular for the better quality accommodation. Finally, it is worth mentioning that the residential market sprang into action as soon as the government allowed the sector to reopen, and most of our offices are currently seeing activity levels at record highs.