Here’s his verdict:
The new year certainly started well, with a very strong rebound in our commercial property markets. A lockdown-free environment contributed to a record January for deals and occupier demand.
We were committed to a calm and considered process of rebalancing across our retail, office and light industrial sectors, resolving imbalances between landlords and tenants over rent arrears. With the end to the ‘lease forfeiture moratorium’ – the government’s eviction ban for commercial tenants impacted by the pandemic – on 25 March, much was anticipated as we burned through January with a plethora of deals across Central London.
So far, it has not yet turned out to be the type of calm and progressive rebound that commercial property so badly needed. We entered the year with the UK economy forecast to grow by as much as 8.7% and then the global shocks of Russia’s invasion of Ukraine, soaring inflation, tax rises and intense pressure on the cost of living started to bite. In essence, the UK economy is probably not going to bounce back quite as fast as we would have liked. There are some genuinely positive sights on the horizon and we are seeing a resurgence in tourism across the capital, which has driven consumer demand.
There is a ‘re-balancing’ taking place, but it is a prickly one. Some businesses are simply unsustainable, and many of the land deals secured pre-Covid have become economically unviable to build out. Certainly there is a calm to the market right now and we view this as nothing more than a slower recovery than was anticipated, as households grapple with rising living costs and the process of re-structuring the UK economy starts to unfold. In truth, we will see the UK economy grow throughout 2022 and the sentiment is undoubtedly positive now that the doomsayers of the Covid-era have been put out to graze.
We have seen our warehouse and light industrial opportunities moved on very quickly with intense demand from occupiers eager to secure sites in key distribution hubs across the capital. Retail itself on the High Street remains a vexing topic, as we continue to draw great demand from providers of medical care and cosmetic treatments, with healthy order books and balance sheets bringing relief to those landlords fortunate enough to secure such occupiers.
We are currently working on a number of fantastic sites across London that – with the right planning – will serve to energise communities once again. The Capital is a machine and it keeps on moving. Bars and restaurants are busy and employees are returning to their place of work as the High Street starts to fill up once again. There might be just a little more caution than was originally anticipated, but on the whole the outlook for 2022 is a positive one.