Commercial property investment volumes across the UK reached approximately £8 billion in the first quarter of 2024, according to Savills.

In its latest Market in Minutes report, the international real estate advisor says that, subject to upward revision, at this trend rate the remainder of 2024 would deliver approximately a 12% increase on the £28.4bn total recorded for the whole of 2023.

Savills says that a major driver of increased investment volumes this year could be the regional office market as the sector’s prime yield currently sits higher than that of the retail and industrial, despite them historically sitting in-line, reflecting specific post-pandemic concerns about the sector, with the yield gap between London offices and the rest of the UK also at its highest point in 32 years, at 2.6%.

“With rental levels for top quality offices in regional cities increasing and the yield gap to other prime markets being the largest this century, wider UK offices provide a very interesting opportunity for investors”, comments Richard Merryweather, joint head of UK commercial investment at Savills. He continues: “The yield gap between London and regional offices is at its widest since 1991, so despite there being some headwinds still to dissipate, there is a real opportunity for buyers to take advantage of the difference now, while many geared buyers are finding the cost of debt for this sector prohibitively high.”

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