Trusted around the world as a reliable source of insider information relating to all things property, the annual Knight Frank Wealth Report is a report countless numbers of property investors and business leaders look forward to every year. Unfortunately, the 2023 report verifies what many of us have known for quite some time now: that 2022 was not a very good year for business and property owners.
Knight Frank’s annual report notes a ‘permacrisis’ as one of leading factors in the cratering of the commercial property market globally. The organisation defines a permacrisis as “an extended period of instability and insecurity.” The question now is whether this crisis will continue throughout 2023.
Instability Is Still Out There
We believe instability is still out there to a significant degree. For example, as we have noted in several recent blog posts, the retail sector continues to struggle thanks to lower foot traffic and inflationary pressures. Some of the biggest names on the high street have announced cutbacks and store closures. A few have even gone bust.
Instability on the high street means instability for property owners who depend on long term-leases and regular rent payments. With retail’s downturn, it is getting ever harder for property owners to work out profitable leases with tenants who are looking to sign for less time, less money, and little long-term commitment.
The unfortunate thing is that retail is not the only sector suffering. Owners of commercial office buildings are looking at the same struggles. All sorts of commercial properties, from medical facilities to warehouses and industrial buildings, are losing value as long-term instability and insecurity continue.
Investors Are Willing to Buy
The Knight Frank Wealth Report 2023 does not go as far as to say that the coming year will bring a rebound. In fact, their analysis is not even close to suggesting that. But there is some good news in the report, not the least of which is the fact that investors are ready and willing to step in and buy properties. That includes us.
Where you see a retail space not generating the revenue it once did, we see the opportunity to drive revenue in the future. Where you see tenants trying to get shorter leases with longer rent-free periods, we see the potential for additional opportunities down the road. We have the resources and willingness to purchase commercial properties now, while things remain unstable, betting that current economic conditions will not last forever.
If the Resources Aren’t There
Making a go of it with commercial property during tough economic times requires a certain level of resources. If those resources aren’t there, property can become a negative asset. Knowing what we know about 2022’s permacrisis, we know that a lot of UK property owners are being crushed under the weight of inflation and high interest rates.
If the resources aren’t there for you, what is your plan? Do you have a way to rise to the challenges you are currently facing and stick things out until the economy recovers? Only you know the answer to that question. If the resources are not there, we invite you to contact us to learn more about selling your property. We are ready to answer all your questions.
Here’s hoping the permacrisis noted by Knight Frank doesn’t persist through the rest of this year. If it does, things could get even worse for UK property owners. We are ready to help by purchasing retail space, industrial space, office buildings, and more. Even in this downmarket, we are ready and willing to buy.