The commercial property sector has always been known for its resilience, so it is no surprise that in the face of the protracted Brexit uncertainty, much of the sector has taken a “so be it” attitude and ploughed on regardless.
We have spent a lot of time recently talking to clients and contacts – having attended MIPIM, MIPIM Asia and Expo REAL, plus hosting tables at networking events and putting on our own entertainment – and the over-riding message is “we are where we are, we’ve just got to get on with it”. It is a strange situation, because the majority of people agree that there will be a global recession coming soon, but the nature of what the major economies have been through means it is unlikely to be much more than a dip.
The fear factor is missing because many still bear the scars of the 2008 recession and there is a general consensus that whatever comes next is not going to get near to the lows that we experienced a decade ago. Fortunately, the UK is only just getting to the end of the period of austerity that came after the last recession. This has kept public spending under control and makes it more likely that we will see a public spending drive. For the property industry, this may well mean more money for public sector real estate, which will help balance any downturn in privately funded projects.
As a service provider to the property industry, we need to ensure that we have a business that is diversified across the various sub-sectors and through a wide range of specialisms. Fortunately, that has been at the forefront of our business plan for some time now; in the last few years we have increased the amount of work we do in the public and institutional residential sectors, as well as establishing new service lines. Every business is going to have to watch their spending a bit more, but many have been doing that for the last ten years anyway. It might mean cutting back on some of the luxuries within the business, but for well organised and run companies, the next 12 to 24 months should feel like a pinch rather than a squeeze.
The message from the industry is clear; transactions are going to continue, projects will progress and that hardy resilience – that makes UK commercial real estate attractive to global investors – will help maintain stability.