Predictions for the UK Office Market in 2016 have been revealed.

The commercial property sector in the United Kingdom should expect any improvements in 2016. That is according to Knight Frank's Chief Economist, James Roberts. buy property in qatar

In 2016, Mr. Roberts expects the following commercial business patterns in the United Kingdom:

 

Bank debt is more readily available.

The Eurozone is already implementing quantitative easing, which we expect to continue well into 2016. The UK, on the other hand, will raise rates next year, and the financial markets will price it in ahead of time. This might lead to a carry trade, in which UK banks with excess cash from the Eurozone pursue higher interest rates. As a result, bank origination teams will be under pressure to put the new money to work. We assume that if lending is increased, UK commercial property would benefit from the increasing evidence of rental growth.

 

A change in the nationality of the average buyer

Overseas investors have made unprecedented purchases of commercial property in the United Kingdom in recent years. We expect foreign interest to continue, but the nationalities of the buyers will most likely shift. Buyers from emerging market countries such as China and Malaysia have previously been active in the market. However, the Chinese economic downturn, as well as the collapse of many commodity markets, would almost certainly have an effect in 2016. We foresee less competition from emerging market investors, as well as some sale to repatriate income. With the US Dollar high, the market could see a significant increase in American investors in 2016.

 

Rented office space is increasing at a faster rate than predicted.

The office vacancy rate (the amount of vacant office space as a percentage of total stock) in central London is at a fourteen-year low and continuing to decline. The vacancy rate in London's West End district is at its lowest level since 1989. In 2015, this resulted in rental increases across the board in central London submarkets, and an insufficient development pipeline, in our view, would result in more rent increases in 2016. More businesses are wondering, "What back office functions should we transfer out of London to lower-cost locations?" Rent development will be transmitted to regional office markets as a result of this.

 

Business threats will intensify as a result of political developments.

Any of the risks to the UK economy as a whole could become more severe in 2016, with ramifications for commercial real estate. As the date for the 2017 Brexit referendum approaches, some foreign investors will become wary of investing in the United Kingdom. The Scottish referendum resulted in some buyers being momentarily put off, while others saw it as an opportunity to bid on assets with less competition. Those in the first camp outnumbered those in the second. If polls indicate that the referendum would be a close contest, it will have an impact on commercial property demand. There's also the possibility of a pound run if the government fails to persuade financial markets that it's doing enough to fix the deficit.

 

The office desk's slow death will proceed.

'Agile' work areas in workplaces, such as sofa areas, team space, and even games rooms, were the domain of fashionable advertising agencies and tech start-ups ten years ago. Agile work areas, in more conservative ways, are becoming more commonplace among UK companies from all sectors when acquiring new offices. Companies are recognizing the advantages of moving away from the desk in terms of connectivity, team spirit, and employee satisfaction. Furthermore, when a company no longer assigns a desk to anyone, it saves time and money. In 2016, agile offices will continue to grow in popularity.