Top 5 Trends to Watch in the UK Commercial Property Market

The city of London in the UK is one of the world’s major business centers. As such, the UK, in general, attracts all types of investors from all over the world. Therefore, it makes sense to look at what the immediate future may hold for the UK commercial property market, especially following Brexit.

This write-up discusses some of the top emerging trends in the UK commercial property market as technology continues to revolutionize all industries while companies try to adapt to the changing business environment.

Demand for Industrials and Warehouse space to increase

The emergence of social media platforms has changed the way people interact with each other, and with businesses. People are now spending more time online than they do in one-on-one conversations, and this has shifted business approach on customer acquisition and engagement. Therefore, most businesses are now basing most of their operations in online platforms with just a few and necessary tasks completed inside offices.

To facilitate such massive online transactions, businesses need warehouses or storage facilities, as well as industrial properties for the distribution and storage of merchandise. Therefore, as the e-commerce marketplace continues to grow, more storage and distribution outlets will be required and this will boost demand for industrial properties.

Downtowns-driven growth

As economic slowdown continues to bite in various regions, some of the world’s top cities might experience a slight decline in demand for commercial property. In fact, reports already indicate that while property prices in London continue to rise, the rate of property transfer and occupancy has failed to keep up with what the outskirts of the city and other less popular cities in the UK have been reporting.

This is partly because of the high cost per square foot that a company is likely to pay for a  London office space located in West End or Kings Cross, compared to what they would pay for an office located in Watford or Dartford. As such, the downtowns are now in high demand with companies moving to tighten their expenses as fears of a potential Brexit-triggered mini financial crises continue to grow.

Co-working and shared workspaces

Coworking and shared workspaces have emerged as two of the most preferred methods of renting office space in the modern corporate world. In today’s real estate market, companies have embraced the latest trends as they try to manage fixed costs more efficiently in a fiercely competitive business environment.

The demand for coworking and shared workspaces in cities like London has also been boosted by the fact that most of the companies opening offices in these vibrant markets operate in the technology sector, or other markets that do not involve dealing with inventories.

Augmented reality for Interior design

Another trend to watch out for in the UK commercial real estate market is the use of augmented reality in interior design, especially when designing coworking or shared workspace offices. Augmented reality allows designers to interact with elements of the real world while at the same time using computer-generated sound, graphics, and video to come up with implementable designs.

Companies like HTC, Microsoft, and Apple are leading in the augmented reality market with technologies that are being used in the design, education, and video games to create a real-life experience. This could help interior designers come up with proper designs quicker with cost benefits eventually transferring to future occupants.

Alternative Financing especially for small businesses/startups

The property market has strong links with the credit market, and this applies to both residential and commercial properties. While residents take mortgages to finance the purchase of a new house, commercial property owners take loans to construct office complexes. Big companies might find it easy to access credit from the mainstream lending institutions but for small businesses and startups, this might be a little tricky.

Every year, several startups are launched and they require funding to finance their first few years in business. Some banks are not eager to support businesses that might close within a couple of years thereby defaulting from loan repayment. As such, these businesses and startups will continue to explore alternative financing opportunities in the rapidly growing peer to peer lending and crowdfunding platforms.

Activity in such platforms including Zopa, ThinCats, and Funding Circle, among others, will only continue to grow now that some of the EU top banks have planned to gradually relocate their headquarters from the UK following Brexit.

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