04/12/2020
Hey there! Whilst COVID-19 hit the world by storm, the story hasn’t been the same across all sectors of the property industry in the UK. We thought it would be good to share our impression over the past few months and give an insight into some of the main deals which have occurred of late.
Retail
Of all the sectors, this has undoubtedly suffered the worst. Whilst there were pre-established problems in the sector prior to the pandemic, it has in no way helped. From the shutting of non-essential shops to the shift to online retailing, the high street has suffered major losses over the past few months. This was only reinforced this week with the announcement of the Arcadia Group going into administration closely followed by a similar announcement from Debenhams.
However, it's not all doom and gloom. Supermarkets have seen record revenues this year with Morrisons and Tesco even opting to repay the business rates relief offered to them by the Government mid-pandemic. Furthemore, certain online retailers who have very little high street presence, such as Amazon and clothing brands such as PrettyLittleThing, have seen massive growth with them becoming ever more dependent on the efficiency of their services.
Industrial
In complete contrast to the high street, and probably partially to blame for retail’s demise, the industrial sector has facilitated the demand and shift to online shopping. 2020 is set to be a record year for industrial transactions with over 50 million square feet set to be transacted by the end of Q4. Amazingly, 37% of this was made up by online retailers. There has also been an increased demand from companies needing greater IT capabilities as a result of people working from home in the multiple lockdowns and people binging shows 24/7 on streaming services worldwide. This sector is creating some serious excitement!
Office
Despite people being forced to work from home, the investment into office spaces hasn’t subsided. It is expected that by the end of 2020Q4 that around £4.5 billion will have been invested into the London office sector. Some keynote deals include the recent £480 million acquisition of 1 London Wall Place by an individual from the Middle East, as well as Landsec securing consent for the Timber Square development in London which is set to be the largest zero carbon office development ever in the UK. In a similar vein, COVID-19 has impacted the office market greatly. Technology is being considered more than ever including building apps for non-contact passage through properties, digital leasing, and a marked increase in flexible working and live-work space demand.
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