Real Estate Investments
in Q4 – Forecast
Real Estate Investments in Q4 – Forecast
Autumn 2023, is set to be another interesting phase for the commercial property market. Property stock remains low and rental demand for the best properties can be very high. Now is the perfect time to make strategic investments in prime real estate. With the market dynamics evolving and new opportunities emerging, Unica Capital recognises the opportunity to continue investing in this sector. Below, we explore the current landscape and reasons why investing in property, particularly in Real Estate Investment Trusts (REITs), is a smart move in Q4.
Unlocking Prime Real Estate Opportunities:
Despite economic uncertainty, a rapidly rising cost of debt, stubborn inflation, and corporate demand fluctuations, the real estate market is showing signs of resilience and growth. A closer look at the Q3 data reveals that this is the time to act swiftly and invest in high-quality prime real estate spaces. Here’s why:
- Tenant Attraction and Retention: Prime real estate spaces play a pivotal role in attracting and retaining tenants. In a competitive market, tenants are increasingly looking for high-quality properties that enhance productivity and employee well-being.
- High Demand for Quality Spaces: The demand for premium real estate spaces is on the rise. Investors who secure these best-in-class assets in prime locations can benefit from strong rental income and capital appreciation.
- Meeting ESG Targets: Buildings that meet ambitious Environmental, Social, and Governance (ESG) targets are in high demand. Investing in and refershishing such properties to meet these standards not only aligns with responsible investing but also positions your property favorably.
- Held property value: The top-end of the Prime Central London market, continues to outperform the lower end of the Prime Central London market, with prices in the latter falling by -1.7% on the year, vs -0.6%.
- Resilient Prime Rentals: London, a global financial hub, has experienced a 2.7% annual rental increase in prime properties. This trend highlights the potential for steady income and growth in prime rental markets.
Property Week has reported that Landsec has announced strong occupier demand for prime office space, with a 100bps increase in occupancy in its central London portfolio. Additionally, they signed £17 million of lettings at rental values exceeding estimates, underlining the appeal of high-quality spaces.
A Carter Jones report highlights that a key factor supporting the case for prime real estate acquisition is the scarcity of high-quality supply, particularly in key city centers such as the City of London. Developers face cost and supply chain challenges, and this lack of supply will continue to support prime rental levels.
The Unica Capital Portfolio has benefited from this demand and is positioned to offer high returns for long-term real estate investments, with a portfolio made up of quality rental spaces in sought after prime real estate locations.
As we enter autumn 2023, the UK property market continues to offer promising investment opportunities. While some areas may experience price corrections, the prime and super prime markets remain robust. For overseas investors, London offers stability and attractive tax structures. As prime office rents increase, Unica Capital and investors play a pivotal role in the city’s growth and prosperity.
In a world where some are divesting portfolios, those who seize the opportunity to invest in prime real estate and REITs in Q4 are likely to reap strong rental returns and capital appreciation. The real estate market is evolving, and smart investors should take action now to position themselves for long-term success.
Published: October 5 2023
Author: Byron Baciocchi