According to new research from Swedish bank Handelsbanken, large portfolio professional landlords have confidence in the UK property sector and see investment opportunities there in 2023.
The majority interviewed said they were planning to acquire at least one new asset in the coming year, according to the independent research.
Other key findings include the fact that six out of 10 investors are set to acquire more properties in the year ahead; and of these, over half plan to diversify into new sectors.
Some 92% expect to see valuations rebound, while London and the Southeast are cited as the most attractive regions.
The research in full
The Handelsbanken professional landlords survey – based on nationwide research among large UK investors with an average of 29 properties worth £14 mln each – found that 59% plan to expand their portfolios in the year ahead, underlining their confidence in the long-term value of UK property as an asset class.
Just 14% expect to sell some or all their properties.
Over half (57%) of those looking to buy more properties also plan to diversify into new sectors, with offices (43%) attracting the most interest as investors look to take advantage of depressed valuations.
The overwhelming majority of respondents (92%) expect the value of their portfolio to increase over the next 12 months, with 39% predicting it will grow by over 20%. Only 8% thought it will broadly stay the same.
James Sproule, UK chief economist, at Handelsbanken, said: 'The bottoming out of commercial property prices in Q1 2023 corresponds with reasonably positive sentiment expressed towards the sector in this survey.
'Commercial property values saw a major correction in the second half of 2022 as a direct impact of the higher interest rate environment. Average retail property prices were down by 15%, office prices were also down by 15%, and industrial unit prices were down by 25%.
'In addition, there are the ongoing considerations around post pandemic working practices and retailing habits which, until they are more settled, will be weighing on commercial property valuations.'
Geographically, three-fifths of respondents expanding their portfolio are also planning to buy in new regions. London was cited as the most attractive region over the next 12 months by investors (27%), followed by the South East (26%).
Areas seen as less attractive for property investment are Yorkshire and the Humber and the West Midlands, both attracting interest from only 9% of the sample.
Danielle Coe, Leamington Spa branch manager said: 'As we can see from these results, there's a regional variation in landlord sentiment.
'The findings highlight how important it is to know the area where you are planning to invest, especially as we can see landlords say they're looking to diversify geographically.'