Impact of Covid on Commercial Real Estate market

We are seeing strong demand from clients for high quality commercial assets with strong covenants, long leases and good tenant quality in the post-Covid environment. Whilst certainly some investors are waiting on the sidelines for the dust to settle there are others taking a longer term view and looking to pick-up attractive properties with good fundamentals and to transact at improved yields given the current market. In particular, dollar denominated international clients with dry powder are looking to take advantage of the relatively low value of the pound to acquire UK assets.

On the supply side we are witnessing more off-market opportunities as vendors test the waters and quietly market their properties to a fewer group of serious investors. We expect the supply pipeline to reduce, in the medium-term for Grade A office space as construction activity slows down and existing tenants take advantage of the current market conditions to renew and extend leases.