Investment in commercial property reached £3.2bn in September, which is a six month high for 2020.
The figures, from Colliers International’s October Snapshot, suggest the highest peak for investment volumes since March, when a national lockdown slowed down the market.
What is interesting to commercial property solicitors is not necessarily the amount, although that shows a general confidence in the commercial property sector, but the building of momentum.
In the first week of October alone, property deals were worth £1.7bn, showing a boost for sectors that had been struggling but were beginning to turn around, as well as the continued rise in industrial sectors that have seen substantial eCommerce revenue.
Whilst the industrial sector has been the primary driver for property investment, owing to strong demand for increased warehousing space, retail and office spaces also saw significant increases, up £450m month-to-month for the former and up £330m for the latter.
The figures suggest a strong fourth quarter, aided by the escape of the UK economy from recession as well as an exceptionally strong and fast-moving property market as a whole.
Like nearly everything else, the current circumstances are somewhat volatile, and with an increase in high and very high Covid-19 areas, there is the potential for the economy to slow down again, with its consequential effects on commercial property.
Much of what happens next will depend on the situation, as well as how much the government helps both businesses and workers through challenging times.
We have seen the effect of the stamp duty holiday and the job retention scheme, but what replaces or complements these schemes will be important to determine the trajectory of the commercial property market.