Search Acumen has released its latest (Q3 2019) edition of Commercial Real Estate Insights, which predict a slump in new build sales in London by the end of the year.
According to the report, commercial buyers’ appetite for new build property has been increasingly focused on areas outside of London this year, with 83% of transactions falling outside the M25 – up from 74% in 2017.
Search Acumen’s analysis of HM Land Registry (HMLR) data shows that overall new build sales to commercial buyers across the whole of England and Wales
are currently down 7% year-on-year in 2019, when comparing registered transactions between January and May (5,771 versus 5,364).
But outside of London, 2019 is likely to be another busy year for new build commercial transactions beyond the M25 where buyer activity is keeping pace with 2018’s figures despite market uncertainty.
London commercial new build purchases in the doldrums
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 2019, the capital recorded just 928 transactions compared to just 1,372 over the same period in 2018. This 33% drop suggests that total annual transaction numbers within London will be significantly down for 2019 overall, falling to the lowest level since before 2016, unless the market picks up markedly before the end of the year.
Strong regional areas drive new build success in 2019
With activity increasingly focused outside the M25, 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 2019, with Liverpool leading the way on 254 completed purchases. Birmingham (183), County Durham (113), Redbridge in East London (109), East Riding of Yorkshire (108) and Slough (100) have all reached three figures already this year.