Overseas buyers are starting to look at the UK commercial property sector, according to PricewaterhouseCoopers (PwC).

PwC said buyers, mostly from Germany and the Middle East, were starting to return to the UK market and were seeking properties with long leases and tenants with covenant strength.

However, the prospect of rising unemployment, which is increasing the fastest among the 18-24 year old segment, was of direct concern to the real estate industry, John Forbes, PwC’s real estate industry leader for Europe, the Middle East and Africa said PwC’s UK Real Estate Insight research.

He said: ‘Fewer people occupying desks will add to the issue of grey space in offices as well as reducing their capacity to spend in the shops,’ adding retailers and landlords would be particularly concerned and affected by this.

‘Although there are signs that the banks are starting to take more action, this is resulting in a small number of insolvencies rather than a major increase. Even where administrations are occurring, this is not resulting in a fire sale of assets.’