It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Michael Porter, Senior Director within CBRE’s Valuation team in Leeds.
CBRE’s 2024 market outlook report indicates a nascent economic recovery expected in the second half of 2024. Investors are currently cautious and this sentiment is likely to continue into the early months of 2024. However, confidence should return once interest rates start to reduce and inflation declines.
The Bank of England has stated that the base rate is expected to remain elevated during 2024, although they are conscious that delays in rate cutting would dampen the general anticipated economic recovery over the next couple of years.
Investors interested in the Yorkshire market are likely to continue to prefer the living sectors which have, to date, been more resilient to recent economic pressures, and industrial assets are also likely to be favoured as an investment opportunity.
Commercial real estate will likely be more attractive in 2024, with investment prospects set to improve as value declines have stopped in some sectors and slowed in others.
Pricing across sectors appears to be stabilising with adjustments, particularly in the industrial and office sectors largely having taken place in the latter part of 2022 and throughout 2023.
It is also expected to be a year for opportunistic equity buyers or those with lower debt requirements and whilst a significant number of loan refinances are due during the year, the cost of debt is expected to fall and should improve the viability for buyers utilising debt. With higher yields now applying to office and retail stock, these assets could be favoured by contracyclical investors, seeking greater returns and accepting higher levels of risk for doing so.
