Uk Property Market Overvıew 2023

COMMERCIAL MARKET

Commercial investment activity will increase in the second half of 2023 but the focus will be on offices and retail in which rental income is most regular and secure. Moreover, most of the occupiers have an increased motivation to transform their properties which will also be affected by rising costs. Therefore, a partnership working between landlords and occupiers should be established to reconcile the upcoming business rates, revaluation and decarbonisation. “Investors were in a distinctly ‘wait-and-see’ mode at the end of 2022, given the uncertainty within the market. We are now seeing more buying and selling
decisions being taken, and there is increased positivity in terms of sentiment” (Carter Jonas, 2023).

OFFICES

The volume of office investments has decreased from £3.3 bn in Q2 to £2.6 bn in Q3 in 2022. All largest
transactions have been realized in London, other regions are quieter. 65% of the transactions contain
Grade A and ESG-compliant office buildings. In addition, the vacancy rate in London is 10% and the
average rental value for transactions is 125.50 £/ ft² (1.350 £/m²) in Q3 2022. It is expected that office rents will decline during the recession in 2023. Increasing demand for good quality offices will
increase therefore the buildings that do not match environmental sustainability requirements will
underperform and likely to have long void periods.