Mazuma managers are flocking to a new spot in the U.K. real estate market.
Traditional backing spaces are losing their attractiveness to investors, but the appetite for industrials and logistics times is on the rise.
Industrials and logistics are offering the highest returns “due to the shift from sawbones stores to online shopping, as retailers are looking for more space,” James Carswell, analyst at the merchandise broker Peel Hunt, told CNBC on the phone Monday. “There are numerous people buying online and there’s a growing need for quicker deliverance times.”
The rise of Amazon, eBay and other online shopping accommodations like Ocado is creating the need for large warehouses and storage modules. Alongside growing customer demand to receive purchased items as on the double as possible, this is requiring an increasing number of storage spaces – both big slugs in the countryside and smaller units closer to biggest cities, mainly London.
Miles Gibson, prime of U.K. research at commercial real estate services and investment firm CBRE, told CNBC ultimate week that industrials and logistics are performing “very strongly… and investors are visit with double-digit returns.”
The other side of commercial property, offices, aren’t show as interesting for investors.
“Offices, for example, are affected by the fact the we have thorough employment, nearly full employment, in the U.K. so employment growth is slowing, which carries demand for offices is slowing, so we are expecting rent growth in office sector for prototype to slow as well,” Gibson told CNBC.
Another issue for duty spaces is Brexit and the uncertainty as to how trade between the U.K. and European companies inclination work after 2019.
“Most of the office space is concentrated in London. Because of Brexit and the uncertainty circumambient it, we expect companies to delay big decisions and thus are generally less odds-on to sign a new 20-year lease,” Carswell said.
He added that more high rents and low yields in the office space mean that there is not much elbow-room to make returns in investments in this part of the sector. However, he notorious that there are a few exceptions, including regional offices, which “put up for sale more upside with higher yields and rents which quietly look affordable.”