Offices and hotels key commercial targets as investment falls sharply

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  • 12/10/2017
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Offices and hotels key commercial targets as investment falls sharply
Offices and hotels will provide the greatest opportunity for commercial finance investment in the next year, according to a survey by investment platform BrickVest.

However, this may be challenged by research conducted by De Montfort University which revealed investment by banks and insurers in commercial property fell sharply in the first six months of 2017.

According to the latest version of De Montfort University’s quarterly study, commercial investment totalled £17.6bn in the first half of the year – down 18% on H1 2016 and down 24% on H2 2016.

U.S. investors appeared to be most concerned by the state of the UK market with investment from American banks dropping 28% and US insurers cutting lending by 39%.

 

Property yields

However, the survey of institutional investors by BrickVest suggests they may not need to be so hesitant.

The research revealed that 44% of institutional investors expected commercial property yields to increase in the next 12 months, just 22% believe they will decrease.

Over the next 12 months one in three investors (34%) believed the biggest real estate investment opportunities would be found in the office sector with the same number saying it was the hotel and hospitality industry.

A similar number (31%) of institutional investors thought the industrial sector would present the biggest commercial real estate investment opportunities while one in five (19%) cited the retail and leisure sector.

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