UK commercial real estate entering downturn – RICS

UK commercial real estate entering downturn – RICS

Summary :

LONDON, July 28 (Reuters) – Britain’s commercial real estate sector is entering or might already be in a downturn, according to an industry survey, as higher interest rates push up investors’ financing costs and weaker consumer sentiment hurts demand for retail space.

“The gloomier macro outlook appears to be dampening sentiment across the commercial real estate market,” RICS economist Tarrant Parsons said.

British consumer price inflation hit a 40-year high of 9.4% in June, and financial markets expect the Bank of England next week to raise interest rates by half a percentage point to 1.75%, which would be the biggest rate rise since 1995.

Markets price in BoE rates hitting 3% by early 2023 and RICS said credit conditions for property investment were now tougher.