Political instability, pre-Budget uncertainty, the higher-for-longer interest rate environment and the negative impact of the Building Safety Act have damaged investor sentiment toward U.K. commercial real estate, according to Investec’s fourth Future Living report, which surveyed 50 global institutional investors active in the U.K. living sector representing more than £300 billion ($395 billion) of AUM.
Three-quarters of respondents (76 percent) said that political uncertainty has undermined market confidence, while six in 10 (60 percent) warned that the United Kingdom risks losing ground internationally without faster interest rate cuts.
Despite the market headwinds, investors were positive on the demographic and supply/demand drivers underpinning the living sector. On average, 84 percent expect to increase or maintain their allocation to the living sector during the next five years.
The findings reveal the extent to which regulation — in pa
