As I wrote this time last year, however, previously we’ve been able to track little evidence that a change in President has ever materially affected US real estate investors’ behaviour when it comes to cross-border activity. So, with our own General Election done and dusted with a clear outcome, we are fairly comfortable forecasting greater investor confidence and a recovery in capital value growth in many UK commercial sectors, while still keeping half an eye on macro-economic events.
Pricing in both the office and industrial sectors turned in 2024, and investment volumes rose 20% on 2023, although remained below the 10-year average muted by limited access to finance in the first half of 2024, caution among some buyers, and few vendors wishing to sell into a sluggish market. But going into 2025 things are looking different: we’ve now had two base rate reductions, and, although we shouldn’t count additional cuts before they’re hatched, a further 100 basis points of cuts or thereabouts is widely anticipated over 2025 and 2026, which will continue to reduce the cost of borrowing and, in most markets and sectors, make debt accretive.