Reit dividends at risk as downturn enters new phase

Annual real estate transaction volumes are forecast to slump by a third this year before rising 15 per cent next year, with a leading property agency saying that income is now more of a risk to commercial landlords than further valuation decreases.

Following the release of BNP Paribas Real Estate’s transaction data for the first half of this year, the agency (a subsidiary of the French bank) has forecast that the total UK real estate transaction volume for 2023 will be £41bn, a third down on both last year and the long-term average. But the outlook is positive: that figure will rise 15 per cent to £47bn for the year 2024, and Vanessa Hale from BNP Paribas said the lack of distressed assets coming onto the market showed restraint on the part of debtholders. "Lenders are clearly reluctant to call in badly performing loans that would require asset sales while conditions are tough," she said.