The contrarian view: uncertainty will underpin positive investment returns

The scale of those returns will reflect where the current property cycle stage as well as some of the structural changes facing specific sectors. Within the residential sector, properties in the Midlands and the North offer both higher income returns and prospects for capital appreciation at this stage in the cycle.

However, for the private investor, the regulatory and tax environment means buy-to-let is not a venture for the fainthearted. Institutional investment will play an increasing role, with those championing build to rent learning lessons from a more established purpose-built student housing sector, says Savills.

Commercially, Savills says structural change in the way we use the high street will continue to influence where the weight of investment falls. But, as we set out elsewhere, those who adopt a simple logistics good/retail bad mentality risk throwing the baby out with the bath water.

Meanwhile, whatever the travails of WeWork, the underlying shortage of good-quality office space, especially in London, is set to underpin the rental growth prospects in that sector. From a structural perspective, agriculture faces a great deal of regulatory change over the coming five years, though indications are that policy evolution will be gradual rather than sudden. Continuity in the support and trading business environment, and scarcity of supply, in the medium term at least, is likely to underpin land values.

Mat Oakley, Head of Commercial Research at Savills, explains:

“A quick scan through the main commercial property market indicators for the period since 2016 suggests that uncertainty has not been particularly bad for business. Office leasing has been driven by pre-letting and the technology, media and telecoms (TMT) and serviced office sectors, logistics by omnichannel retailing, and overall investment by comparative risk and yields on a global stage.”

Savills top sector picks


  • City of London offices
  • Hybrid retail parks


  • Prime Central London
  • Retirement housing


  • Strategic land
  • The offsetting market

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