The UK property sector will gain momentum and investment will rebound next year if a Brexit withdrawal agreement is reached, claims a report from CBRE.
The property group’s UK Real Estate Market Outlook 2020 forecasts that the economy will have a slow start to 2020, before picking up during the second quarter.
Investment volumes should rebound sharply, claims the report, if a Brexit withdrawal agreement is achieved.
It anticipates UK property will offer “attractive and solid” returns for investors, with low interest rate environment set to continue, and expects total returns of 4 per cent per annum between 2020 and 2024.
CBRE highlighted climate change as a key focus for investors and developers during the coming year, particularly in Scotland as the United Nations will hold a major climate change summit in Glasgow in November.
Up to 30,000 delegates are expected to attend the 26th Conference of the Parties, known as COP26, at Glasgow’s Scottish Events Campus.
As a result of increasing social, political and regulatory pressures, the report predicts that carbon neutrality will become an explicit goal for property decision-makers in 2020.
This will see the industry move towards an end-to-end approach to tackling climate change, ranging from the sourcing of raw materials to redevelopment. CBRE expects most upcoming investment strategies to incorporate carbon neutrality.
CBRE predicted that several sectors will outperform the UK average next year. These include occupier office markets, as office-based employment increases and supply for high quality space remains low, and the industrials and logistics sector, which is expected to enjoy sustained growth as business increasingly expand into the e-commerce market.
Miller Mathieson, managing director for CBRE Scotland said: “While political uncertainty will persist throughout 2020 as we negotiate our future trade relationship with the EU, we expect to see a rebound in investment volumes across Scotland and the rest of the UK.
“The underlying property fundamentals in Scotland’s biggest cities remain strong especially across the office, industrial and operational real estate sectors.
“Climate change is now a major focus of the property industry and there is no doubt that investors, developers and occupiers will prioritise this issue in 2020 and beyond.”