Overview
The commercial investment market across the South West continues to transact, although investors are taking a more considered approach than in previous years. Higher borrowing costs, inflationary pressures and wider economic uncertainty mean buyers are scrutinising opportunities more closely, but importantly, deals are still happening.
A shift toward greater scrutiny
Rather than a lack of appetite, the market has shifted towards more detailed analysis. Investors are paying closer attention to tenant covenant strength, lease terms, future asset management opportunities and overall income security before committing to acquisitions.
More stock, stable yields – but not all assets are equal
We are also seeing an increasing number of investment opportunities coming to the market. For purchasers, this means more choice, albeit yields have generally remained stable. In this environment, expert advice is critical—understanding lease structures, covenant strength, re-letting risk and future expenditure can make the difference between a resilient asset and one that proves challenging over time.
Where demand is strongest
Well-let properties continue to attract interest, particularly where income is secure and dependable. We are currently selling an investment property let to Cancer Research UK, which has generated encouraging levels of interest due to the strength of the tenant and income profile. Investments let to medical and healthcare occupiers also continue to perform strongly, supported by resilient demand and long-term sector fundamentals.
Industrial remains competitive
The industrial sector continues to draw strong investor demand. Well-let multi-let industrial estates remain scarce across the South West, and good opportunities are often keenly contested. As a result, prime and well-secured industrial investments continue to achieve competitive yields.
What this means for investors and vendors
Whilst the market may be more cautious than in recent years, there remains capital looking for the right opportunities. For investors, the key is careful selection and informed decision-making. For vendors, realistic pricing and strong advice remain critical to securing a successful outcome.
To discuss an acquisition or disposal, visit our Investment team page: Investment – Vickery Holman
