A report published by the British Property Federation (BPF) has identified an annual economic output of £137.5 billion generated by the UK commercial real estate market. This is equivalent to over 7% of the UK’s total gross value added (GVA).
GVA from the commercial real estate sector increased by just over £30 billion (28%) from 2021 to 2022, indicating significant growth in the market.
Further evidence of the sector’s growth can be seen in the £7.1 billion (18.5%) increase in total tax revenue paid to the exchequer through employment-related taxes, business rates, and other taxes including property transaction taxes.
In addition to playing a large role in the UK economy, the commercial real estate sector is a big employer. The report also found that the industry directly supported 1.37 million jobs in 2022 and a further 1.3 million indirectly, supporting 1 in every 12 jobs in the UK.
The total number of direct and indirect jobs supported by the sector rose by 338,000 (14.7%) from 2021 to 2022.
Melanie Leech, BPF Chief Executive, said: “The commercial real estate sector has demonstrated its resilience and, despite a challenging economic outlook during 2022, is now supporting an even greater share of jobs across the country and contributing billions of pounds to the national economy.
“Businesses operating in the sector are continuing to navigate a combination of external pressures including build cost inflation, interest rates, and skills shortages in key areas. At the same time they are fully committed to tackling the urgent need to reduce embodied and operational carbon emissions.
“This report shows what a significant economic partner the sector is to government and the importance of ensuring that it works effectively in partnership with the public sector not only to stimulate growth and increased productivity, but to create healthy sustainable communities across the whole country.”