The future of property investment

By: Neil Chatterton, Managing Director, Caxtons

Managing Director Neil Chatterton has been reviewing the future of property investment.

There is no doubt that the lockdown measures, instigated by the government in response to the Covid-19 pandemic, have had a significant impact on property investment – particularly in the high street retail sector.

Commercial landlords have suffered at the hands of the some of the larger multiple retailers in particular, some of whom have not paid any rent since March despite having now been open and trading again for the past 3 months. Others are looking at or threatening landlords with CVAs if they don’t agree to reduce rents or a move to turn-over rents. When these are instated, lower rents can be forced on landlords as well as arrears effectively being written off or reduced.

Other sectors are however doing better. Industrial property remains in demand, convenience stores are doing well and some

retailers, cafés and others in parades and densely populated areas are also prospering as a result of more people working from home. Investment properties in these sectors remain in demand with prices holding up well.

The demand for offices is likely to reduce as more companies agree an increased level of working from home. However, parts of workplaces are likely to be re-purposed once the pandemic is over and used more for meetings, team building exercises and the like. The sector may also present opportunities for more residential conversions as a result of permitted development rights, which have recently been extended, now also allowing retail properties to be converted to residential.

The property sector has faced challenges before, but in the longer term it will no doubt adapt, evolve and remain attractive to the financial institutions.

For the past 8 years, Caxtons has been engaged in compiling the annual Kent Property Market Report (KPMR) (2013 – 2020), and has provided the data for the Ashford Property Market Reports.

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