The commercial real estate market is showing positive signs of recovery. Investment activity has increased over the last year and there is growing optimism in the development market.
However, there is still a degree of uncertainty about how this year will play out. Recent announcements to cut public sector spending, combined with uncertainty over occupier demand and a potential “double dip”, means that there is still cause for caution. Whilst equity is readily available, opportunities for investment are being hampered by a shortage of available prime stock.
The volume of equity and debt focusing on prime assets has led to an emergence of a clear two-tier market. Investors have been favouring low risk investments both in terms of direct and indirect investments in property funds. Though with the development market now looking to equity to fill the funding gap, there may be more opportunities on the horizon. The predicted shortage of City space has meant that a number of projects are now being revisited, with Land Securities and British Land already stepping up their development programmes.
Our team is recognised as the pre-eminent real estate practice. We continue to work closely with clients on some of the most high profile deals in the market, including the lettings of Watermark Place and Drapers Gardens, the purchase of 8 Canada Square from HSBC and Blackstone’s purchase of a 50% interest in Broadgate. We work with our clients to identify and create optimum deal structures that minimise risk and maximise returns.
Our broad exposure to the market, and knowledge of the key trends, provides us with a unique capability to add value for our clients and to facilitate deals. Through our sector specialists - who understand and have an appreciation for real estate as an asset class - we provide a full service solution.