Despite the economic uncertainty, large portfolio professional landlords are in a confident mood, according to the findings of an independent survey commissioned by Handelsbanken.
The Handelsbanken Professional Landlords Survey – based on nationwide research among large UK investors with an average of 29 properties worth around £14 million each – found that 59% plan to expand their portfolios in the year ahead, underlining their confidence in the long-term value of UK property as an asset class. Just 14% expect to sell some or all their properties.
Over half (57%) of those looking to buy more properties also plan to diversify into new sectors, with offices (43%) attracting the most interest as investors look to take advantage of depressed valuations.
The overwhelming majority of respondents (92%) expect the value of their portfolio to increase over the next 12 months, with 39% predicting it will grow by over 20%. Only 8% thought it will broadly stay the same.
Geographically, three-fifths of respondents expanding their portfolio are also planning to buy in new regions, with London and the South-east seen as most attractive. 20.5% of landlords rated the North-west as most attractive, while the West Midlands and Yorkshire & The Humber regions were seen as least attractive for additional investment.
James Sproule, UK Chief Economist, at Handelsbanken commented:
“The bottoming out of commercial property prices in Q1 2023 corresponds with reasonably positive sentiment expressed towards the sector in this survey.
“Commercial property values saw a major correction in the second half of 2022 as a direct impact of the higher interest rate environment. Average retail property prices were down by 15%, office prices were also down by 15%, and industrial unit prices were down by 25%.
“In addition, there are the ongoing considerations around post pandemic working practices and retailing habits which, until they are more settled, will be weighing on commercial property valuations.”
Large-portfolio landlords included those with both residential, commercial and mixed portfolios. Research was conducted by PureProfile in March 2023 among 200 professional property investors.
The 2023 Handelsbanken Professional Landlords Survey is available to read in full here.
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