Confidence in the UK’s office leasing
market has wavered after signs of an uptick, according to Avison Young’s newly
launched commercial real estate market activity index.
The index, based on a fortnightly survey
of 630 principals globally, aims to capture a snapshot of market sentiment from
investors, owners, occupiers and developers across the private and public
sectors.
This is scaled from -100 to +100, with
zero representing “no change”. Each principal scores responses from 5
(representing significantly stronger sentiment) to 1 (significantly weaker).
Confidence in UK office leasing has
fluctuated considerably since AY began collating the figures.
In late April, activity was deeply
negative (-60), compared with the previous two weeks; by early July this had
strengthened to +17, before declining again to -13 on 20 July.
Despite these fluctuations, AY said that
UK real estate is broadly showing “positive signs of improvement” amid the
fall-out from Covid-19.
In the UK, industrial brokerage showed
the strongest uplift among transactional business lines, reaching a +17 score
in late July.
Property and facility and asset
management was the top-performing category within the non-transactional
services in the UK, where activity has improved consistently. This scored +17
in the latest July figures.
Planning and development consultancy
activity has also grown week-on-week, reaching +14, although with “greater
fluctuation”. Valuation and business rates also showed improvement.
UK project management and building
consultancy has made a “significant recovery” since early June. This was
attributed to more work associated with reconfiguring and reopening offices as
lockdown measures eased.
Corporate and other occupier consulting
has also enjoyed an uptick in recent weeks, as companies evaluate how best to
move forward with their real estate strategy. This stands at +10, compared with
-17 in late April.
At the other end of the scale, activity
in the UK retail sector was consistently the weakest.
Nick Axford, global head of research at
Avison Young, said: “It is clear that business and economic recovery from
Covid-19 will take time and is likely to be a bumpy process.
“The positive momentum in global real
estate markets is still evident in our latest survey, and it is encouraging to
see positive signs of improvement in sentiment across the UK real estate
market, highlighting its resilience on an international platform.”