UK commercial property update and outlook
The market is past the year anniversary since the “mini budget” that kickstarted a sell-off of UK government bonds, a sharp upward trajectory on the cost of debt and repricing of commercial property. The All Property total return was -13.6% in September and will become progressively less negative over the remaining months of 2023 as the events of late 2022 fall out of the figures. However, the trends for the three major property sectors are different and the rankings of segment performance are changing. Industrial is moving up while offices, notably London City, are moving decidedly down.