By Emanuela Barbiroglio

Commercial property universe falls £43bn in value

New data from the IPF has shown that the total value of invested and owner-occupied commercial property in the UK fell by £43bn last year, from £926bn at year-end 2015 to £883bn at year-end 2016.

The IPF revised historic estimates of the UK’s commercial property universe following the publication of new rateable values, which increased by more than assumed in previous estimates.

While the amount held as investment stock remained static over the year, at £486bn, owner-occupied property value fell to £396bn.

Overseas investor holdings hit the £139bn, accounting for 29% of UK commercial investment market. This figure is nearly double the amount of 2006. Most of it is situated in London: 78%, compared to 41% for UK investors.

Foreign owners dominate the City of London office market, holding the 61%. However, they hold only 41% of West End and Midtown offices.

The total value of commercial property in London is now £883bn, 43% higher than it was last decade. London assets currently represent 38% of the commercial property stock, but 23% of GDP.

In terms of type of property, retailers are the largest commercial sector in the UK at 38%, followed by offices, unchanged at 31%, and industrial at 22%.

According to the IPF, the largest domestic owners of UK commercial property are collective investment schemes and listed property companies (including REITs), accounting for £153bn or 31% of the total.

Finally, the estimated value of the UK’s residential stock, at around £5.9 trn, is more than seven times that of the commercial sector.