The UK property sector will continue to perform solidly, despite the ongoing economic and political unknowns, according to CBRE’s 2018 Market Outlook report published today.

CBRE’s 2018 Market Outlook forecasts continuing economic growth for the UK, despite the uncertainties caused by Brexit. The report argues that those uncertainties are likely to peak in 2018, causing some further hesitation in business and consumer confidence. Employment growth looks likely to slow further. Rental growth may thus be patchy in some property sectors.

However, the Outlook finds that some sectors will weather the uncertainty well, including industrials and the so-called ‘beds’ sectors (build-to-rent, hotels, student accommodation and healthcare). This is because these sectors exhibit non-cyclical characteristics, or serious mismatches of supply and demand, or some form of structural change.

The Outlook examines how the key economic, political, and technological forces will affect property markets in 2018 and beyond, taking a comprehensive sector-by-sector review of the property industry, from flexible office space to e-commerce and ‘proptech’, to data centres and built-to-rent.

Miles Gibson, Head of UK Research at CBRE
The political noise is likely to reach fever pitch during 2018, but don’t be deceived: the UK economy is likely to grow as fast next year as this year, supported by an absence of further rate rises from the Bank of England and a benign global economic environment. That includes, ironically, solid support from the continued European recovery. While some property sectors will see extremely patchy growth performance, the rise and rise of Industrials & Logistics looks likely to continue, and the ‘beds sectors’ like hotels, built-to-rent and healthcare are also set to grow strongly. Whilst significant risks remain, from reduced consumer spending power, changes to US interest rates and the Brexit denouement, we anticipate robust investment volumes in the property sector in 2018.
Miles Gibson, Head of UK Research at CBRE

Outlook highlights


  • UK economy to grow as fast in 2018 as in 2017 (1.5%), supported by strong European and US growth
  • Weaker job growth and subdued consumer spending expected
  • CBRE forecasts no further UK interest rate rises until early 2019
  • Brexit uncertainty is temporary, with an economic bounce back expected once uncertainties are resolved


  • Property investment market surprised on the upside in 2017, with a surge in transaction volumes
  • Expected that property investment volumes will be roughly the same in 2018 as in 2017, supported by strong overseas interest
  • Total returns to property expected to be around 4% in 2018


  • 2018 is crunch year – with substantial political noise and turbulence expected
  • Although agreement on withdrawal issues has taken time to secure, these issues are not likely to have significant impact on real estate
  • Trade and migration policy remain very significant areas of uncertainty for real estate. Labour shortages in construction, retail, healthcare and hospitality remain a real possibility, and trade access in highly regulated service sectors, including financial services, cannot be guaranteed.
  • In the face of these uncertainties, some businesses are preparing to move some staff to elsewhere in the EU. However, the extent of such moves is probably overstated, with the majority of threatened moves not yet implemented.


  • Weaker UK economy will translate into weaker occupier demand and rental growth
  • Rental growth will vary across the country, with stable rents or small increases in the large regional markets, but small declines in parts of Central London

Industrials & Logistics

  • Star performance in 2017 is likely to continue into 2018 with rental growth of over 5%, underpinned by continued mismatch of supply and demand
  • Change in the retail sector will continue to affect industrials and logistics property – and new transport technologies will gain credibility

Retail, Pubs and Leisure

  • Retailers and leisure operators will experience a tougher year as consumer spending growth slows – very little rental growth is expected overall
  • Significant amounts of new high-quality shopping centre space will open, and some prominent mergers will continue the convenience retail revolution
  • Customers and retailers will further exploit new technologies, with the physical store continuing to redefine its role.