We are delighted that January 2023 has truly been a great start to the year for those in the construction industry. Exciting new programmes of work, such as the Lower Thames Crossing, have been agreed and the construction industry has received a number of positive mentions in mainstream press coverage. Continued industry growth is forecast which is anticipated to create a wealth of new job opportunities. Topping this off, however, is the news by real estate experts Savills who, earlier this year, have reported that rental investment in commercial property in the City of London is at a 7 year high .
Investment in commercial properties in the City reached an impressive turnover of £572.2M in January this year, which is not only the highest January turnover the market has seen since 2016, but is also an increase on the total volume recorded for the combined final three months of 2022.
This staggering turnover figure was the result of eight deals that were completed during the month of January, representing a very pleasing net total yield figure of 4.5%, exceeding that of the West End, which has a recorded net total yield of 4%. Often, when a number of high profile deals complete simultaneously, the initial buzz quickly retreats into the depths of history, yet this is unlikely to be the case in this instance, as the forecast for the market remains extremely positive. Savills are also tracking another 16 assets which are under offer and anticipated to complete later this year at a total combined value of £1.67Bn.
With so many high value and high profile deals making headlines last month, and many more expected over the coming months, the outlook for the commercial fit out market looks extremely bright. Following completion, each building will be assessed by its new owners and designs developed to repurpose them as required to suit their specific requirements and circumstances. We have no doubt that consideration will be given to incorporating green spaces, installing energy efficient heat, water and lighting systems and designing floor plans that will accentuate the space that is available.
With many of the deals that completed in January being managed by international investors, this not only increases confidence in the UK construction industry, but also hints at the City of London beginning to regain its appeal in the international market following the fallout of Brexit. This is great news for every business that operates within the city and, with luck, may result in increased footfall and consumer spending in the city this year and beyond.
It is hoped by Savills and the rest of the property industry that these deals will pique the interest of other would-be investors and encourage all of those with an interest in commercial property to consider the vast wealth of experience and history that the City of London has to offer. It is recognised that a number of investors are remaining cautious at present, however, there is an anticipation that this may begin to ease once the impact of their Q4 valuations and debt analyses are conducted and new plans set in action for maximising profits going forwards.
Having worked on some of the biggest design and build (D&B) as well as traditional fit out projects across the UK over the last few years, our Work Space Team are standing ready to support investors and construction specialists alike to embed the critical skills and talent that will be needed. The goal will be to maximise output from these buildings, getting them to a fully operational state in the shortest possible time in order to become revenue generating.
Our talent solutions are Deliberately Different. We offer a mix of permanent and freelance resource that is hand-picked to suit the needs of each individual client. Our innovative solutions to team building offer the ideal blend of cost-effectiveness and efficiency, supporting your business to deliver the highest profile projects in the space. Our people are innovative and creative and can identify the most appropriate talent solution to meet your needs and maximise your gains.
To find out more about our Deliberately Different approach to team building, please contact Alex Poulter at our Bankside HQ - 0208 332 2727.