Challenging conditions in the commercial real estate market have contributed to a collapse in the number of local authorities in England and Wales attracting annual commercial real estate sales of more than £1bn, according to new analysis from property data provider Search Acumen – but West Yorkshire is amongst them.
It’s one of just nine areas of England and Wales seeing more than £1bn of commercial real estate sales during 2023, according to analysis of official data from HM Land Registry.
This is the first time the number of £1bn+ local commercial real estate markets has dropped into single figures since comparable records began in 2017.
Andrew Lloyd, MD of Search Acumen, said: “Our analysis points to a persistently flat picture for commercial property growth since 2021. Debt, interest rates, and investment returns and opportunities continue to bite commercial markets, leaving some investors hesitant to commit until they are confident in a healthier forecast ahead.
“Whilst these figures are disappointing for the economy, the real estate industry is adept at navigating periods of uncertainty, often using these times to strategise and capitalise on emerging opportunities. We know there are some pockets of investment thriving, focusing on the fundamental strengths of prime assets and emerging opportunities in sectors such as technology and life sciences. This selective approach to investment underscores the importance of detailed, reliable property data in informing strategic decisions. For those of us in the property data and search sector, this reinforces the need to continue innovating to provide fast and effective tools that enable transactions to happen swiftly and confidently in a sensitive market.
“For transaction volumes in particular, it is also important to view this development in the context of wider industry delays. Over the past two years, we’ve witnessed a dramatic reduction in the number of conveyancing companies, creating a bottleneck among those that remain. This consolidation may now be stabilising, allowing the surviving firms to adapt and potentially expand their capacities to meet the growing demand, something which may be more reflective in HMLR figures later in the year.
“Looking ahead, whilst the election’s outcome will undoubtedly have a substantial impact on broader economic policies that could either stimulate or stifle property market activity, the wheel of fortune also lies in the hands of the Bank of England as the industry waits with bated breath for interest rates to reduce. If this happens, by the end of 2024 we may well see an injection of energy into the sector and more billion-pound districts emerge.
“Until then, it will be vital for a new Government to bolster the amount of money flowing into the UK commercial property sector if it is to successfully oversee a continuation in economic growth. Policy and industry must work together to enable the sector to bounce back from its cycle low.”
