An overview of portfolio investment activity within the UK commercial real estate market.
As well as analysing the key trends, we provide a review of the notable portfolio transactions across sectors, a breakdown of the buyers and sellers and a 2019 outlook.
During 2018, we advised on £2.5bn of real estate acquisitions and disposals. Three-quarters of this total was transacted either ‘off-market’ or via restricted marketing campaigns.
In an uncertain environment, the portfolio investment market is becoming more opaque, and trusted advisors make all the difference.
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- ‘Beds and Sheds’ account for two thirds of portfolio investment.
- Alternatives accounted for over half of portfolio activity with £5bn transacting across 34 deals – 73% across “Beds” (Hotels 53% and Student 20% of alternative sector volumes).
- Record demand for industrial portfolios with 35 deals transacting totalling £2.54 bn (27%) – the highest volume recorded since our portfolio research began 13 years ago.
- Conversely, retail and mixed portfolio transaction volumes were at their lowest levels over this same time period.
- Office portfolio volumes were up 11% compared to 2017 levels, driven by three notable transactions over £200m.
- Portfolio transactions accounted for a quarter of investment outside of London underlining the importance of portfolio deals to overall investment levels.
- Overall portfolio transaction volumes were down on 2017 levels skewed by a lack of transactional activity in retail and mixed sectors, but remain above the long-term average.
- Significant appetite for portfolio opportunities – albeit limited to certain sectors and composition types with the majority transacted off – market.