Commercial buyers’ appetite for new build properties is increasingly focussing outside of London, an analysis by Search Acumen has found.
The majority (83%) of transactions fall outside the M25, up from 74% in 2017.
Caroline Robinson, commercial real estate business development manager at Search Acumen, said: “London has long been seen by investors and real estate professionals as the commercial real estate centre of England and Wales – not surprising when one considers the sheer amount of construction that’s been going on for the last 20 years.
“But it seems that the price of land coupled with an anaemic economy at the mercy of Brexit negotiations has led to a significant slowdown in new build real estate sales to commercial buyers.
“Just two years ago, more than a quarter of all new build sales happened within the M25; this year, fewer than a fifth are happening in the capital.
“While new build real estate sales have significantly curtailed in London, key cities in the North of England have gone from strength to strength.”
Overall new build sales to commercial buyers across the whole of England and Wales saw a 7% year-on-year decrease.
When looking at the number of transactions completed year-to-date, the 33 boroughs of Greater London have experienced a marked slowdown in commercial appetite for new build properties.
Between January and May, the capital recorded just 928 transactions compared to just 1,372 over the same period in 2018.
London now accounts for just one of six local authorities which have registered at least 100 sales of new build property to commercial buyers between January and May.
Robinson added: “These figures should serve as a wake-up call to the commercial real estate sector.
“Developers, financiers and law firms that retain a ‘London-centric’ worldview are likely going to miss out on much of the new business that’s happening in England and Wales.
“We are seeing a revolution happening outside of the M25, and firms need to be dedicating more time and people-power to ensuring that they are looking outwards towards the growth and potential in the market in 2019 and beyond.”