Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Take-up numbers appear to be overstating the strength of underlying occupier demand in London’s office markets. Indeed, the solid, but less buoyant employment data is more consistent with the subdued rate of rental value growth at present. That said, the …
4th October 2018
September’s fall in the headline construction PMI does not alter the fact that construction activity has improved taking Q3 as a whole. Current demand conditions also appear to have improved, but firms remain cautious about the outlook. … CIPS/Markit …
2nd October 2018
Net lending to property increased strongly in August. However, the details show that the increase was driven by lending for standing property, while net lending for development declined for the fourth consecutive month. … Lending to commercial property …
1st October 2018
Rental value growth slowed to 1.6% y/y, from a recent high of 2% y/y in March. The retail sector continues to lead the slowdown, with annual rental value growth now declining across all the retail sub-sectors. Meanwhile, office sector rental value growth, …
25th September 2018
Recent weak tourism numbers paint a subdued picture of demand in the hotel sector. But the softness appears to reflect a return to more normal levels, rather than being an indication that hotel demand will be lower for a sustained period. Nevertheless, …
21st September 2018
The combined value of deals completed for UK commercial property in August surged by £1.5bn, or by 44% compared to the previous month. But, that improvement was driven almost entirely by a single deal and this year’s total was around 15% lower than August …
17th September 2018
Brexit uncertainty has driven sterling lower in recent months and is likely to mean that the Monetary Policy Committee (MPC) keeps interest rates on hold for some time. But provided a Brexit deal is agreed, we still think that rates will rise at a faster …
13th September 2018
As an indicator of the health of occupier markets, today’s employment data are rather stronger than they appear at first sight. The data show that while firms have reduced their reliance on part-time staff, full-time jobs continue to be created at a …
11th September 2018
The pace of development activity in the industrial sector has softened over the past year. However, leading indicators suggest that a recovery in activity may be in sight. So, although the outlook for occupier demand is still strong, an increase in the …
10th September 2018
The IPF Consensus have revised up their forecast for capital value growth. As a result, the outlook for total returns in 2018 has been pushed higher. Beyond the next few months, however, the Consensus forecasts echo our view that the UK commercial …
7th September 2018
Today’s decline in the CIPS/Markit Construction PMI suggests that the improvement in construction activity in July was short lived. Commercial construction activity fared slightly better than the other sectors. Nevertheless, firms’ still appear cautious …
4th September 2018
After growing around 1% y/y for the past three years, annual retail warehouse rental value growth slowed sharply in Q2. Some recovery in rental value growth is expected as real wage growth has turned positive. However, with the outlook for household …
31st August 2018
Net lending to property increased slightly in July, but to a lesser extent than lending to the total economy. Further, lending for development showed no signs of improvement. … Lending to commercial property …
30th August 2018
The value of commercial property deals disappointed in July. At just £3.5bn, the value of investment was 12% lower than a year ago. The weakness was broad-based. In particular, the value of office sector investment declined to £1.8bn, from an average of …
24th August 2018
The latest data suggest that commercial property investment for the second half of the year is off to a poor start. With investment in the retail and industrial sectors unlikely to keep pace with 2017 levels, we think that annual investment activity will …
21st August 2018
Investment activity in July softened sharply. It is too early to say what the weaker start to H2 means for the rest of the year. But, with interest from overseas investors returning, it seems unlikely that there has been a decisive change in investor …
15th August 2018
Today’s labour market data showed some moderation in employment growth. However, with job creation mostly in full-time positions and real wage growth still positive, the details do not point to a major deterioration in occupier demand. … Employment …
14th August 2018
Capital value growth is slowing, but a further moderation in rental value growth along with a gradual rise in property yields means the slowdown has further to run. Nevertheless, our above-consensus outlook for GDP growth, combined with the fact that …
13th August 2018
In this follow-up to our recent Global Economics Focus “Why is property so often the source of trouble?” we assess where in the world the biggest risks to property prices lie. House price falls in a number of places look imminent. And there are several …
8th August 2018
The MPC has estimated that the long-term equilibrium interest rate for the UK economy lies between 2% and 3%. Such estimates are uncertain, but they do tend to reinforce the idea that, barring a significant economic or financial market shock, the …
6th August 2018
It is now ten years since the property-induced global financial crisis and house prices in many countries are rising rapidly again. So now seems like a good time to assess whether property, residential and commercial, is on course to cause trouble for the …
2nd August 2018
Today’s CIPS/Markit Construction PMI suggests that there was further improvement in commercial construction activity in July. However, given the volatility of the series we are wary of concluding that this marks a decisive change in developers’ confidence …
Following a strong increase in May, net lending to the commercial property sector declined in June. This fall was in contrast to the sharp increase in net lending to the economy as a whole. … Lending to commercial property …
30th July 2018
According to the RICS, the growth of the supply pipeline in the commercial property sector moderated a touch during the second quarter. As has been the case for some time, supply side constraints, particularly labour shortages, are acting as a drag. But …
26th July 2018
Indicators suggest that growth has increased from 0.2% q/q in Q1 to perhaps 0.4% q/q or 0.5% q/q in Q2. The labour market continues to post solid jobs gains, suggesting firms are confident about the economic outlook. Further, positive real wage growth is …
25th July 2018
Following weakness in Q1, today’s RICS Survey pointed to a further, modest deterioration in occupier demand conditions. However, the headline numbers paint an overly soft picture, with the deterioration primarily being driven by issues in the retail …
19th July 2018
There was another strong increase in job creation in May. And the fact that firms are struggling to fill vacancies suggests little change in the current health of occupier markets. … Employment …
17th July 2018
Investment activity picked up in June, consistent with indications that growth in Q2 has recovered from the soft start to the year. Nevertheless, on an annual basis investment continued to soften. … Commercial property investment …
13th July 2018
Credit availability for residential mortgages edged up in Q2, but only for lower LTV mortgages. And while the credit conditions for commercial property were broadly unchanged, for the first time since 2015, lenders expect credit availability to rise next …
12th July 2018
The evidence suggests that the upswing in industrial rental values has started to fade. As investors cotton on and reassess the outlook for income growth, the current, rapid rate of yield compression is also likely to fade, sharply slowing the pace of …
5th July 2018
Today’s CIPS/Markit Construction PMI suggests that the recovery in construction activity continued in June. Further, improvements in the future business conditions and new orders indices suggest that firms are slightly more optimistic. Even so, the …
3rd July 2018
A strong monthly increase in lending for standing property drove net lending to property in May. But a dip in net lending for development may be a sign that lenders’ risk appetite is still weak. … Lending to commercial property …
29th June 2018
Data and surveys suggest there has been some recovery in economic activity in the UK during the second quarter. Developments in the consumer sector have been positive, with annual growth in retail sales reaching a 13-month high and the pace of job …
26th June 2018
The evidence suggests that the headwinds currently buffeting the retail sector are taking a larger toll on shopping centres than on other types of retail property. As a result, and in contrast to the other retail segments, shopping centre capital values …
21st June 2018
The latest labour market data paint a worrying picture for occupier demand and rental value growth in the South East office market. Yet other indicators are more positive, and if we are right to expect the economy to strengthen as the year goes on, office …
19th June 2018
The surge in flexible office take-up over the past five years has raised the question as to whether office vacancy rates could be distorted as flexible offices tend to not be fully occupied. However, their small share of total office stock and the fact …
13th June 2018
The annual pace of job creation increased further in April. However, a slowing in average earnings growth and an increase in the number of part-time workers suggest the headline numbers may not be as positive for occupier demand as they appear at first …
12th June 2018
Investment activity in May failed to show any signs of a revival. Although overseas investment declined, this was comfortably offset by a renewed interest from institutional and occupier investors. … Commercial property investment …
11th June 2018
In contrast to the problems on the high street, leisure sector fundamentals look strong. The outlook for leisure rental value growth is positive, supported by rising real incomes and solid underlying occupier demand. Furthermore, despite competition in …
6th June 2018
Following a strengthening in activity in April, todays’ CIPS/Markit Construction PMI suggests the recovery in commercial construction activity has been sustained. But falls in the future business expectations and employment indices suggest there still …
4th June 2018
Current forecasts for commercial property prices to plateau rather than peak would represent a significant break from the boom/bust cycles of the past. Yet while some parts of the market look vulnerable to a negative shock, it is hard to make a case that …
1st June 2018
Over the past three months, lending to commercial property has stalled. But the weakness has not reflected a decline in lending to new development, suggesting there is still some appetite to take on risk. … Lending to commercial property …
31st May 2018
Our forecast for rental value growth in 2018 is similar to that of the IPF consensus, but there is a greater degree of variation in forecasts for capital value growth. However, over coming years there is a consistent expectation that there will be a soft …
25th May 2018
Recent weakness in growth is expected to be short-lived, but given the slowing already seen, we have trimmed our annual growth forecast for 2018 from 1.8% y/y to 1.6% y/y. However, occupier demand fundamentals look positive. The labour market continues to …
24th May 2018
The bout of softer-than-expected inflation and activity data which caused the MPC to step back from hiking Bank Rate in May is certainly reason for caution. But like the MPC, we think that temporary factors were behind the slowdown, and suspect that …
17th May 2018
Following the string of weaker outturns so far over 2018, investment activity softened further in April. However, if we are right that GDP growth will recover over the remainder of the year, investment activity is likely to hold up from here. … Commercial …
16th May 2018
Robust job creation, a high level of vacancies and another small uptick in the pace of average earnings growth paint a positive picture for occupier demand. But with London punching above its weight and rental values in the capital already high, the …
15th May 2018
Given the prevailing level of risk-free rates, it is hard to make a compelling case that commercial property is overvalued as an asset class. Admittedly, valuations in some segments, such as offices in London and the South East, look rather more stretched …
11th May 2018
We do not think recent softer economic data or the MPC’s decision to hold fire today have set the tone for 2018. Our above-consensus growth forecast is consistent with the MPC continuing to increase interest rates this year which, in turn, will begin to …
10th May 2018
Compared to other office markets, the Rest of the South East has been performing well. However, we do not expect this outperformance to last. A fresh surge in occupier demand seems unlikely and, as such, a slowdown in rental value growth in the Rest of …
3rd May 2018
