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£64bn invested in the UK in 2018 as property market continues to outperform

Download our full 2018/19 UK Capital Markets Review & Outlook here.

The commercial property market continued to confound expectations and deliver strong results throughout 2018.  Overall UK investment volumes of £64bn in 2018 offered a second consecutive year of unexpected upside, and comfortably exceeded our forecast of £55bn.  Investment activity was just 1% down on an exceptionally strong 2017, and 33% ahead of the 10-year average.

Why does UK real estate continue to offer an attractive destination for global investors?  What were the biggest deals, and which regions and sectors saw the highest levels of investment?

In this report JLL’s Capital Markets team analyse current investment trends and highlight key themes for the upcoming year.  We also publish the results of our latest investor survey, completed as part of our industry-leading Property Predictions event. Find out what the commercial real estate industry is expecting in 2019, which alternative sector is looking most attractive to investors and which global regions are expected to contribute most to investment into UK real estate.

Ali Meadows, Head of UK Capital Markets:

“Surprisingly strong transactional activity throughout 2018 highlights the enduring appeal of the UK market, with a diverse and global pool of investors continuing to support robust levels of investment.  As we predicted, South Korean buyers returned to the market in 2018 and look set to remain major players.  Living space continues to grow, and while scale remains a challenge, these sectors are rapidly moving up investors’ wish lists.”

Jon Neale, Head of UK Research:

“While politics continues to dominate the headlines, the commercial property market has quietly performed well.  We expect 2019 to be more challenging as Brexit finally comes to a head, but the fundamentals remain strong, with buoyant occupational markets supporting sustained investment across the UK.  Looking forward, we anticipate investment volumes of around £55bn and total returns of 4.3% in 2019.”

 

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