TRCS MARKET INSIGHT INVESTMENT

MARKET INSIGHT – INVESTMENT

The Royal Institution of Chartered Surveyors (RICS) UK Commercial Property Monitor 22 reports that recent increases in interest rates are having a more widespread negative impact on investor sentiment, which saw enquiry levels fall nationally in Q4 2022 across all sectors both in terms of local and overseas investment demand.

However, on a more positive note, our Commercial Agency team has worked hard through this challenging landscape and delivered some fantastic results on investment property transactions, which include the following retail highlights:

  • Shirley Road, Southampton – a fully let retail and residential investment producing £26100 pa sold off the asking price to show a net yield of 8.68%.
  • Leigh Road Eastleigh – a vacant shop and a flat let on an AST, sold at the asking price of £325,000.
  • Bitterne – a shop let to a national tenant at £20,500 sold off a net yield of 7.88%

Higher borrowing costs have been reported by the RICS as weighing on investor demand and prompting an adjustment in valuation levels which may be the case for some larger lots over the near term. But with tenant demand still edging higher across the industrial sector, the outlook for prime office rents remaining in positive territory, and secondary retail demand proving very resilient, the prospect for smaller investments in particular is still looking rather healthy.

Even a much larger retail investment in Chandlers Ford has just been sold for nearly £3m, perhaps indicating that reports of the demise of the investment market may be premature.

To find out more about the commercial property market, please contact Jeremy or a member of the team on 01962 888900 (Winchester office) 023 8000 2020 (Southampton office).