Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Over the last year, UK all-property yields have risen above those in the euro-zone for the first time in a decade and we think this gap will widen. This crossover is unusual, but it largely reflects differences in monetary conditions. … Are we too …
4th March 2019
A large increase in development lending was not enough to offset weak net lending for standing property. With the outlook for investment and development activity is subdued, it seems unlikely will pick up substantially this year. … Lending to commercial …
1st March 2019
A weaker outlook for the retail sector drove a reduction in the IPF Consensus forecast for all-property total returns this year to 2.4% y/y. Echoing our own forecasts, outside of the retail sector, any falls in capital values are expected to be modest. … …
28th February 2019
Investment market activity was weak in January, with just £2.6bn deals completed. Overseas interest was particularly soft, providing an indication that, as the Brexit deadline approaches, unease may be starting to deter purchases of UK commercial …
27th February 2019
The slowdown in commercial property investment appears to have accelerated in January, indicating ongoing concerns about a Brexit deal. This uncertainty is expected to be temporary, but it is unlikely that investment activity will rebound this year. … …
19th February 2019
The large outflow from open-ended property funds in December was disconcerting. But, barring a no-deal Brexit, it is unlikely to herald a return of the problems seen after the EU Referendum. … Should we be worried about property fund …
14th February 2019
Should a Brexit deal be reached within the next few months, the UK’s financial markets will probably buck the global trend with money market rates, Gilt yields and the pound all rising by more than is widely expected. The FTSE 100, however, probably won’t …
12th February 2019
Capital value growth is expected to fall across the board this year. However, outside of the retail sector, falls are expected to be modest. Nevertheless, given the solid outlook for economic growth, and the fact that interest rates are expected to remain …
8th February 2019
A sharper than expected drop in retail values in the latest MSCI Quarterly Index has led us to revise down our forecast. But retail woes are in large part specific to the sector and we don’t expect capital values to be hit as hard elsewhere. … Dismal …
6th February 2019
With weakness in the retail sector dragging on occupier demand and investment, all-property capital value growth is likely to soften further. … RICS Commercial Property Market Survey …
31st January 2019
With capital and rental value growth expected to slow further in 2019, it seems unlikely that willingness to lend will pick up. As such, the softness in net lending is likely to continue. … Lending to commercial property …
30th January 2019
Despite poor Christmas trading, the improvement in retail sales in the middle of 2018 pointed to a recovery in retail rental value growth this year. Nevertheless, with the retail stock still adjusting to changing consumer preferences, we think that excess …
29th January 2019
With uncertainty, and labour and financial constraints weighing on construction activity, the development pipeline isn’t likely to increase substantially. … RICS Construction Market Survey …
24th January 2019
Indicators suggest that UK economic growth slowed towards the end of 2018, in part due to households and businesses delaying spending in response to Brexit-related uncertainty. This is likely to continue into the first part of 2019. But, once the Brexit …
The heavy defeat of Mrs May’s Brexit deal in Parliament means it is more likely that Article 50 will be extended. The greater uncertainty this implies will impact on both the UK economy and on commercial property. But the bigger picture remains unchanged …
21st January 2019
Credit availability for both commercial and residential property tightened in Q4, and with Brexit uncertainty likely to be extended, that trend looks set to persist. … Bank of England Credit Conditions Survey …
17th January 2019
If a Brexit deal is secured, the release of pent-up demand will help investment activity. But, with interest rates rising and valuations looking stretched in many sectors, it’s unlikely that there will be a strong rebound. … If the Brexit fog clears, will …
16th January 2019
Weakness in investment in December likely reflects investors holding fire due to uncertainty but, even so, we do not expect investment to rebound in 2019. … Commercial property investment …
9th January 2019
Falls in real estate equity values over the turn of the year suggest that all-property capital values could decline by 10% y/y. However, we think these movements overstate the weakness. Even so, the outlook for occupier demand and interest rates indicate …
8th January 2019
Consistent with the softness seen in investment and development activity, net lending was subdued in November. And with capital and rental value growth expected to slow further in 2019, a sustained improvement is unlikely. … Lending to commercial property …
4th January 2019
Commercial property returns are expected to moderate considerably in 2019 and risks are clearly to the downside. But if we are right and GDP growth rebounds this year, the outlook for office and retail sector rental values could be more positive than the …
3rd January 2019
Softer construction activity is likely to be temporary, held back by political uncertainty and weaker demand. We think that any recovery in construction activity will be limited as labour market conditions remain tight, which should support all-property …
Capital values fell on a monthly basis in November for the first time since 2016. In turn, annual capital value growth slowed to just 3.3%. The main driver of the slowdown was an upward movement in retail yields to the highest levels in one year. … Retail …
19th December 2018
Demographic changes clearly favour UK healthcare property. However, the recent strength in investment and returns does not seem to have fully accounted for the cyclical nature of the nursing and care home market. In turn, yields look too low given the …
18th December 2018
At the all-property level, the difference between non-prime and prime yields does not suggest that either is mispriced. However, non-prime yields for shopping centres look low relative to prime yields and therefore are more susceptible to upward pressure, …
13th December 2018
Although investment activity has picked up gradually over 2018, the low value of deals completed in November suggests that commercial property investment will struggle to reach 2017 totals this year and we expect this weakness to carry over into the start …
12th December 2018
London office and retail property are set to produce only middling performance in the next few years, when compared to Western Europe’s other major markets. We think London’s large development pipeline will constrain rental value growth in the office …
The improvement in job creation in October was encouraging, but with the labour market near full capacity, employment growth and therefore occupier demand are still expected to moderate. … Employment …
11th December 2018
With all of the hype around the potential impact of online retailing on industrial occupier demand, there has been a big shift in the relative pricing of industrial assets. Although rents in the UK have surged, supply-side constraints, rather than demand, …
7th December 2018
We expect a no deal Brexit to bring a hit to UK commercial property capital values of between 5% and 9%, which will be mild compared with past crashes. Even in our central forecast, assuming a Brexit deal is struck, we expect capital values will fall by …
6th December 2018
November’s improvement in the headline construction PMI suggests that construction activity is holding up in the fourth quarter. However, the improvement in supply conditions in the commercial construction sector is not enough, in our view, to put …
4th December 2018
The volume of office space completed this year in central London is on track to be the highest in 14 years. But with new space under construction declining, a more restrictive supply pipeline is likely to prevent falls in rental values, even as occupier …
3rd December 2018
Over 2018, the UK commercial property sector has proved more resilient that both we, and the IPF Consensus, expected. However, a gradual upward movement in yields over the coming years is expected to result in returns slowing further. Despite this, …
30th November 2018
Subdued lending in the commercial property sector is consistent with the fact that investment activity is steady and that development activity is limited. As such, it adds to the evidence that commercial property rents, capital values and total returns …
29th November 2018
In the year to October, all-property capital value growth softened to 4%. On an annualised basis, monthly movements suggest that capital value growth will reach 2% this year. Outside of the retail sector, yield compression continues to support capital …
26th November 2018
After a prolonged period of strength, capital values in central London shops looks likely to slow. However, with the structural drivers of retail demand in London’s favour, we think that longer-term prospects remain positive. … Will the central London …
22nd November 2018
The recent political chaos in Westminster means that the chances of the UK leaving the EU without a deal have risen, in our view, to about 50/50. In a no deal Brexit scenario, we would expect sterling to dip – although there are reasons to think that the …
20th November 2018
Capital value growth is expected to turn negative next year as rental increases remain subdued and property yields inch higher. But solid economic growth, combined with expectations of a gradual interest rate tightening mean that the sector will …
19th November 2018
The value of deals completed in October held up at a similar level to the previous two months. Although investment activity has been improving recently, this appears to reflect a recovery from the softer start to the year, rather a sign that investment …
14th November 2018
September’s employment figures showed a healthy recovery, though this was not enough to change our view of a relatively subdued outlook for UK occupier demand and rental value growth. … Employment …
13th November 2018
Subdued office rental value growth in Scotland is weighing on the Rest of the UK aggregate. Although a material upturn in Scottish rental value growth seems unlikely, the outlook for other regional markets is positive, implying scope for Rest of UK office …
8th November 2018
October’s rise in the headline PMI for UK construction reversed a three-month downward trend, but does not change our view of continued caution about prospects for the rental growth. … CIPS/Markit Construction PMI …
2nd November 2018
The fall in office floor space per worker, aided by the trend towards more flexible working environments, appears to be permanent. It means that each square foot of space has become more productive and therefore the sustainable level of rents for this …
31st October 2018
Net lending to the commercial property sector continues to be driven by lending for standing property. But firms’ appetite to borrow for development appears weak. … Lending to commercial property …
29th October 2018
The RICS Survey for Q3 showed a deterioration in tenant demand. Respondents continue to expect a modest decline in rents over the rest of the year. … RICS Commercial Property Market Survey …
25th October 2018
With rental values stable in September, annual all-property rental value growth slowed to 1.4% y/y, from 1.6% y/y a month earlier. This mainly reflected weakness in the retail sector. But annual rental value growth in the industrial sector has also begun …
24th October 2018
The improvement in construction workloads in the third quarter was encouraging. But with labour shortages constraining activity, the development pipeline is unlikely to increase substantially. … RICS Construction Market Survey …
18th October 2018
August’s labour market data were weak. But the details suggest that the weakness reflects recruitment difficulties and is unlikely to be a sign of deteriorating occupier demand. … Employment …
16th October 2018
In September, the total value of commercial property investment softened slightly compared to August despite including a single deal worth £1.46bn. And with the market still suffering from a lack of liquidity, it seems unlikely that investment activity …
15th October 2018
Banks reigned in the availability of mortgage credit in Q3, driven by risk aversion and softening house price expectations. Meanwhile, a fall in risk appetite and concerns about the economic outlook drove a reduction in the availability of credit to …
11th October 2018
