Market sentiment among London’s lender and investor community has improved, with the living sectors, residential development and prime logistics being the most sought-after areas, according to a Savills survey.
The survey, which was conducted among attendees of Savills’ 36th Financial Property presentation in London today, revealed general sentiment towards investing and lending has improved on 2023 levels across all property classes.
Attendees said they were most likely to invest in living sectors, residential development and prime logistics and least likely to invest in secondary offices, secondary retail and prime retail.
The market optimism comes on the back of a year in which assets traded were well down on historic levels and a first quarter of 2024 where totals were at a 12-year low. Nevertheless, Savills expects the market to bounce back as recovery takes hold.
Savills head of UK and cross border valuation Nick Harris said: “Positive sentiment is returning, with the living sectors, residential development and prime logistics most favoured by the London lender and investor community. It is interesting to note the divergence of views on where the markets are heading has tightened across most asset classes, suggesting greater comfort has been reached on price discovery.”
Meanwhile, there is still an expectation that many investors are holding back in the hope of seeing distressed assets hit the market.
Savills head of commercial research Mat Oakley says: “The post Great Financial Crisis period suggests the peak in distressed sales will come in the next couple of years. Some sectors will recover quicker when interest rates come down, especially in sectors where there is conviction or mispricing and we’re already starting to see yields harden for retail warehouses, industrials and hotels.”
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