2019 could be a turbulent year for commercial property management with the outcome of Brexit not yet certain. What trends will we see as the year continues?
The property industry — like many other British industries — is eagerly awaiting the outcome of Brexit to understand the full impact it will have. If a no-deal happens, commercial property value could fall by a staggering 48%. But even with a deal, commercial property values could still reduce. “Brexit clauses” in commercial property leases have become commonplace since the referendum, as the future is uncertain for many businesses.
There could be valid reasons for the concern — since December 2017, there has been a decline in commercial construction in the private sector.
But from looking at the trends, it’s not all negative. One particular commercial property industry is in demand, and the UK’s capital is still showing promising growth.
While Brexit lingers over the heads of property investors, what does the rest of 2019 look like for those in the property industry? Logican takes a look the commercial property management trends for the year ahead.
The Future of Retail
You need only take one look at any UK high street to see the changing needs and demands of shoppers having a significant impact on the sector. eCommerce stores allow shoppers to browse products at times that are convenient for them and buy from the comfort of their homes. In 2019, retail job losses are expected to rise by 20%, and retail landlords may need to start looking at how they can repurpose their properties.
Increase in Flexible Workplace
Flexible office workspaces are increasing rapidly. Shared workplace provider WeWork now has 47 offices in London alone. With this shift in where companies are running their business comes a need for shorter and more flexible leases. Commercial landlords need to adapt to this new type of workplace and demand from businesses.
Can Logistics Maintain Its Growth?
Despite Brexit, purpose-built warehouse space is a growing market in the UK. Although the rise of eCommerce has impacted the death of the high street, in a twist of fate, it has caused a demand for more storage and warehouse space. This is excellent news for commercial property developers, as the demand for logistics space is high and required to meet the increasing demand. 2019 could see more growth in this area.
London Is Still Booming
Despite the residential property market in London suffering, office space in London is still in high demand. In 2018, the take up of office space in London was on track for a five-year high. This commercial property trend has been noted by many in the industry, with Savills reporting that there is only a year’s worth of office supply left in the City and the West End. After Brexit, 2019 may be the year the demand drops off. For the moment, however, office space is still much needed in the City.
Use of Digital Technologies
Many new technologies are being used to advance ideas and design in the property market and, in doing so, changing the way commercial property is created. One notable example is augmented reality, which is being used to add visual information and 3D dimensions to support the planning and implementation of building properties.
Amid the uncertainty, it’s clear that commercial property landlords and firms will continue to require reliable technology and software. Logican’s property portfolio software helps commercial property management companies organise and keep on top of payments and the development of properties.
Logican’s property portfolio management software makes managing your property portfolio easier. Request a free demo to find out how our software can improve your workflow.
