In the depths of the recession, investors stayed well clear of commercial property, residential property appearing to be much more of a safer avenue to go down.  It is well noted that when an economy is in terrible straits, the commercial sector of property will obviously suffer the most, being that it relies on the buoyant business sector for acquisitions. This sudden drop in interest even led to many fund managers imposing penalties and delays to those who wished to take their cash out quickly of any commercial related deals.  

Another reason that investment in commercial property is so risky is that it is not as liquid as money financed in an investment trust for example. Basically the investments made on their client’s behalf can’t be bought and sold as shares or bonds. 

But as the economic situation has improved, the investors’ opinion to commercial property has also improved.  The latest predicted GDP growth for the year 2014 is at 2.5 per cent.  

As said by Eugene O’Sullivan MRICS, Director at Morgan Pryce, who was previously based in the City for almost a decade, has noted that “Now that commerce is improving along with the economic outlook, the prospects for the commercial property sector are looking to become more and more prosperous. Commerce requires office space as well as the other forms of commercial space to operate, which will increase the take up of space, increase in refurbishments and lead to a drive in rental growth.”

Cash rich pension and wealth funds are leading in terms of investing in commercial properties, and as the market gets tighter, they are investing in less traditional ‘hot-spot’ locations.

In terms of the outlook for the next couple of years, it is likely that there will be an increase of the development of new commercial structures and a shift in office hotspots across the city.

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.