Photo: Ell Brown
While offices have led the recovery so far, the agency highlights logistics property as a likely contender to steal its crown, thanks to the continuing rise in online retail.
“In Christmas 2012, the internet accounted for nearly 11% of retail sales, and we expect this to exceed 12% this year,” explains Knight Frank. As a result, logistics property is thought to be in increasing demand, particularly as economic improvement in the Eurozone boosts exports.
Retail, on the other hand, will continue to suffer from the rise of online sales, while the possibility of rising interest rates in 2015 may reawaken concerns over tenant covenant.
“Nevertheless, retail does have its bright spots,” the agent notes, highlighting Costa Coffee’s plans to open 300 new shops,
Far Eastern money is also expected to play a bigger role in the coming 12 months. Indeed, a Chinese private equity firm bought an office tower on Birmingham’s Broad Street last month, as investors looking for somewhere to place their money outside of China’s housing bubble look for increasingly far-flung commercial opportunities.