National Investment Market Overview
Alternative Sector
Overview
As we move into 2025, we reflect on what was one of our most active sectors in 2024. Investor demand for alternatives has remained robust over the past year, driven by a preference for assets with long leases and index-linked rent reviews. The living sector, in particular, has experienced renewed interest, with hotel investment transaction volumes reaching their highest levels since 2019. This growth was bolstered by several notable portfolio deals throughout the year, including the LXi Travelodge Portfolio, the Marriott Hotel Portfolio, and the Radisson Edwardian Hotel Portfolio.
Retail Warehouse
Overview
2024 marked a significant milestone for the retail warehousing sector, recording the strongest transaction volumes in the past five years. The market demonstrated remarkable resilience, characterised by high liquidity across all transaction sizes. Notably, the sector's occupational performance was exceptionally strong, with major players like British Land highlighting retail warehousing as a key driver of rental growth within their portfolio.
Industrial
Overview
Despite wider economic challenges and higher interest rates, returns for industrial property have consistently outperformed other property sectors over the one-, three-, five-, and ten-year horizons. A number of funds and ultra-high net worth individuals have capitalized on this and entered the market over the last quarter, helping boost investment activity and drive competition. Deal momentum slowed down in October following the Labour government's budget; however, a flurry of deals going under offer before Christmas helped to revive trading activity.
Offices
Overview
As we look back on 2024, the office market settled at a total transaction volume of c.£7.3Bn, of which £1.5Bn was attributed to the South East. Whilst volumes remain significantly below the 10-year average, positive tailwinds have been seen with a more evolving market overall.
Strong occupier fundamentals, driven by a return to the office and focus on best-in-class accommodation, have led to strong rental growth across the regional markets. In turn, this has increased prime, core assets once again trading in the market, with a notable increase in the quantity of £20M + assets launched to market. Additionally, there has been a strong appetite for value-added and alternative use opportunities, particularly with the start of 2024 bringing much-needed changes to the permitted development rights.