UK: Figures from Lambert Smith Hampton (LSH) show that living sector investment in the UK reached a record high of £4.4 billion.
The UK commercial property market saw its strongest investment figures in the fourth quarter of last year since the third quarter of 2022 with £13.1 billion of assets changing hands. The living sector accounted for an unprecedented 39 per cent of 2024’s total real estate investment volume.
LSH said the record year for living provided “respectability” amid a challenging year for the market, with total all-sector volume amounting to £46.3 billion, up 24 per cent on 2023’s total and only two per cent below the five-year average.
Ezra Nahome, CEO of Lambert Smith Hampton, said in a statement: “2024 finished strongly for both activity and volumes, as buyers and sellers rallied to get deals done before year end. But the solid-looking year on the surface belies a story of extremes; the inexorable rise of the living sectors contrasting with the structural pains of the office sector and the ongoing faith in the UK from North American buyers vs the retreat from the institutions.”
“Into the New Year and sentiment has taken a fresh knock, forcing investors to digest the deteriorating conditions in the financial markets and shifting expectations on interest rate cuts. However, I remain cautiously optimistic that conditions will settle, and 2025 will yield a slight improvement on last year’s volume, even if pricing remains sticky and fails to harden as previously hoped.
“While the recent bond market wobble will keep some investors on the sidelines, many others will find themselves under renewed pressure to sell, providing a ready supply of income-driven opportunities for equity-backed buyers. We should bear in mind that the fundamentals in the occupier markets remain broadly positive, and this extends to offices to some degree. The UK market offers real value when viewed in the international context, especially given the pound’s relative retreat,” he added.