UK Real Estate: Unlocking Opportunities

As we approach the close of 2023, we find the UK economy facing an evolving economic environment. Inflation, which peaked this time last year, has halved over the last year. Interest rates, which have risen to their highest level since the financial crisis, have plateaued and are projected to start falling in the next year. Polling data indicates that Labour may win the upcoming election (which must be held by January 2025), which would result in the first change in government since 2010. Meanwhile, the economy has continued to expand, albeit at a slower pace than many would like. Investment strategies reflect these changing economic dynamics. In particular, real estate strategies have self-sorted into categories of favored and unfavored sectors, based on strength of occupier markets and appetite of capital markets. The attached outlook analyzes the key factors that impact the UK economy and gives our perspectives on their influence on investment strategies as well as a brief overview of our house views on multiple UK real estate sectors.