Commercial view
The major theme in the UK commercial property market in 2014 will be a more widespread recovery. 2013 saw a continued robust pickup in tenant and investor demand for all types of commercial property in London, but we expect that 2014 will see this interest widening to cover the key regional cities, distribution hubs, and regional malls.
This recovery will be driven by improving business confidence on the back of the better domestic and global economic outlook.
We expect debt markets to loosen slightly, though finance for speculative development and tertiary investments will remain virtually non-existent outside London.
Risk-averse international investors will continue to be heavily biased towards the capital city, but some will be tempted to the regions by higher yields and less competition. The more risk-embracing investors will be looking to capitalise on the historically wide spread between London and regional yields, as well as the even wider spread between prime and secondary.