Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
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 …
24th January 2019
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
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
