The nation voted to leave the EU over two years ago, but there is still no clarity or certainty, on what Brexit means. This uncertainty means that businesses are delaying their investment decisions, which is having an impact on the commercial property sector as businesses delay relocation or the opening up additional sites.

Impact of uncertainty on the commercial property sector
The vast majority of residential property is bought by owner occupiers. Their decision to purchase is not driven by investment value but by lifestyle factors such as proximity to family, friends, schools and work. As a result the potential rental income of a residential property has little impact on the ‘bricks and mortar’ value.

Commercial property on the other hand is completely different. The ‘bricks and mortar’ value of commercial property is determined by identifying where there is occupational demand to support a rental income; and whether this rental income is sustainable for the foreseeable future.

Brexit uncertainty is affecting occupational demand in commercial property segments in different ways:

- Retail
The best example of retail woes is the plight of Intu, the shopping centre group which owns Lakeside and the Trafford Centre. These large shopping centres are built in such a way, that they can only be used for retail. Converting them to other uses such, as residential, would involve major planning and redevelopment expense. Therefore, the value of Intu’s retail estate is pretty much determined by the level of occupational demand there is out there for retail units.