UK Economic and Real Estate Briefing – May 2024

Expectations for interest rate cuts may have been delayed last month, but the latest UK commercial real estate investment data confirms market liquidity has begun to improve.

• Following the recession in H2 2023, monthly GDP, business surveys and consumer sentiment data all point to improving economic activity at the start of the year.
• Whilst we accept that interest rates are likely to be cut in the second half of the year, the pace and depth of this reduction will be dependent on significant easing in domestic sources of inflation.
• Commercial real estate investment volume may still be low, but US private equity buyers with value-add strategies are helping to improve price discovery and highlighting pockets of value.
• With the availability of debt also improving, we still expect pricing and investment activity to continue to recover this year.

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