Despite Chancellor Hunt’s rapid reversal of September’s mini-budget give-aways, many worried that today’s Autumn Statement would contain a few more nasty surprises. The timing was hardly fortuitous, with recent data showing UK output in decline and inflation running at 40 year highs. In the event, however, there were few changes to what had already made its way into the public domain.

The need for tax rises and spending cuts has been clearly articulated in recent weeks, calming domestic financial markets and reining in spiralling UK 10 year gilt yields, which having risen to a peak of 4.5%, are now back to slightly more palatable levels of around 3.3%. With much of the renewed fiscal restraint already priced in, further significant reductions in gilt yields were never on the cards today, but in uncertain times, maintaining the status quo is enough to count as a win for real estate debt markets.

Neither were there any major surprises for corporate occupiers or the wider business sector, the planned rise in corporation tax to 25% by April 2023 having previously been confirmed. The real estate industry will have been watching out for updates on the previously announced investment zones – areas designed to stimulate regeneration in local economies. Another particular focus for the industry will be the significant investment announced to help reduce the UK’s energy demand over the next decade, for which at least some of the responsibility will fall upon those in the built environment.

This was always going to be a statement full of difficult compromises, but it leads to two potential opportunity areas for the real estate sector, one practical and one structural. Firstly, as government departments come under even greater financial pressure, there will be an added incentive to release assets or sites for sale or redevelopment. Secondly, although the government recommitted to a number of investment projects and growth in capital spending, there will also be a growing role for the private sector to drive economic, technological and social infrastructure, should it wish to. Is that an attractive proposition? The real estate sector’s contribution to the success of UK life sciences, health care, education, data centres and countless other areas suggests that for the right opportunity, it certainly can be. ”