Worldview: United Kingdom
Like so many global markets, the United Kingdom’s commercial real estate market is feeling the effects of the COVID-19 pandemic, with $17.9 billion in CRE investment for the first half of 2020, according to JLL’s UK Capital Markets Review & Outlook, published in September. The report notes that “this represents a 34 percent reduction on the equivalent period last year and is 38 percent lower than the 10-year H1 average.”
In addition to COVID-19, the U.K. still has the effects of Brexit to contend with, the full impact of which has yet to be fully realized. According to CBRE’s 2020 EMEA Real Estate Market Outlook, the implementation phase of Brexit after the transition period is expected to last for a year or more. During this time, “the U.K. will not have as good access to EU markets as it has now.” While more than half of the country’s investment volume is from international investors, JLL’s report forecasts a drop in this percentage over the next 12 months with the top three capital sources projected to be China and Hong Kong; Germany; and the United States.