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The liquidity of UK commercial real estate

Author

Listed:
  • Fernanda Antunes
  • Matthew Pollock
  • Michael White

Abstract

The trade of commercial real estate is distinguished by its intrinsic costs and time-consuming nature, which carries implications for the performance and risk associated with real estate investments. The Time on the Market (ToM), representing the duration a property actively remains listed, constitutes a pivotal metric for evaluating market liquidity within the real estate sector. Our research investigates the temporal aspects of commercial real estate transactions in the United Kingdom, employing data derived from CoStar and scrutinising a sample encompassing approximately 6,500 transactions spanning the interval from 2013 to 2023.Our findings reveal fluctuations within the ToM indicator. For instance, in 2023, the median duration on the market for office properties amounted to 220 days, whereas for industrial properties, this metric was notably lower at 165 days. This observed variation underscores the inherently dynamic nature inherent in commercial real estate transactions, emphasising the imperative of comprehending and gauging market liquidity by means of the ToM metric.

Suggested Citation

  • Fernanda Antunes & Matthew Pollock & Michael White, 2024. "The liquidity of UK commercial real estate," ERES eres2024-059, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2024-059
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    More about this item

    Keywords

    commercial real estate; Liquidity; time on the market; UK;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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