Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Commercial property investment activity picked up in November. And, contrary to the reports from the FPC, demand from overseas investors has shown little signs of abating. … Commercial property investment …
14th December 2016
The number of people in work fell slightly in October, suggesting that some of the labour market’s recent resilience may now be fading. But we doubt the weakness will escalate to an extent that puts rental values at risk. … Employment …
A recent report argued that the fall in all-property capital values in the third quarter may have been double the one presented in the IPD quarterly index. Yet the same methodology implies that the rise in capital values in the first half of the year was …
13th December 2016
Commercial construction activity faces several headwinds, such as subdued occupier market conditions as well as rising costs. However, if developers believe (as we do) that the economy will recover strongly after 2017, starts of large-scale projects may …
9th December 2016
The construction PMI edged up again in November and is at a level consistent with overall construction output expanding following a contraction in the third quarter. The commercial activity sub-index also increased, and now paints a more positive picture …
2nd December 2016
Economic indicators showed that the economy has held up since the referendum vote. The PMIs point to healthy GDP growth in Q4 and retail sales growing at a strong clip. That said, job creation has showed signs of slowing. Nevertheless, the …
1st December 2016
The vote to leave the EU has polarised opinions about the outlook for commercial property. But we think there are good reasons to be optimistic. The monetary policy response to the vote has helped underpin valuations. Furthermore, with recessionary fears …
30th November 2016
The Colliers/REC survey painted a weak picture of the short-term outlook for commercial property. Respondents expect rising yields and falling rental values to cause a 2% fall in capital values. Our more sanguine view on the economy means that stronger …
At minus £119m, October’s fall in net lending to property only partially reversed September’s strong gains. Yet with little to suggest a shift in lender’s sentiment, we suspect it was driven by weaker investment activity during the month. … Lending to …
29th November 2016
After a significant downgrade in August, November’s IPF consensus figures suggest that some of the gloomiest views are being revised up. That said, although the path for yields implied in the figures is less steep than last quarter, the consensus is still …
28th November 2016
The fact that real rental values are 22% below their previous peak and housing transactions are set to strengthen, suggest that retail warehouse rental values have substantial scope to rise. However, structural changes, as well as the coming squeeze on …
25th November 2016
Looser monetary policy, a healthy run of economic data, as well as some signs that the impact of the referendum on capital values is fading, mean that we have made some minor upgrades to our forecasts since our last Analyst. Granted, the uncertainty …
22nd November 2016
The recent rise in gilt yields has fully reversed the falls seen after the EU referendum. Although they have followed Treasury yields up following Trump’s election victory, this is not the whole story. The fall in sterling – as a result of growing …
The recent surge in gilt yields has reversed much of the widening in the property-to-gilt spread seen after the referendum. Yet, at 390bp, the gap between the all-property yield and gilts is still wide by past standards. That said, in markets where …
18th November 2016
The number of people in work dropped back slightly in September, reflecting a relatively broad-based slowing in the labour market across different job types. … Employment …
16th November 2016
The size of London’s active pipeline has risen slightly since May. More supply poses a risk to rental values. However, the likelihood of a rental correction depends on both the net increase in supply and any shortfall in demand, and in our view neither, …
15th November 2016
Investment activity fell back by about a third compared to September. With overseas investors still net buyers of UK property, and the effects of the referendum on capital values now fading, we think this marks a more sensible pace for the months ahead. … …
11th November 2016
September’s construction PMI rose marginally; a pleasant surprise given the consensus among forecasters was for a fall. The rise was driven by the commercial sub-index, although the sector’s PMI is still well below its pre-vote level. … CIPS/Markit …
2nd November 2016
In line with the improvement in the property survey data and a more active investment market, at £476m, net lending to the property sector entirely reversed August’s losses. … Lending to commercial property …
31st October 2016
Overall, September provided some reasons to be optimistic. With occupier market conditions holding up well, and monetary policy expected to stay loose, we suspect that the bulk of the capital value adjustments are now behind us. … Capital values appear to …
27th October 2016
The latest RICS Commercial Property Survey highlighted that occupier and investor demand have improved, while supply conditions are likely to be constrained. Both factors should provide support to rental and capital values. … RICS Commercial Property …
The widely held view that the drop in the pound is the primary factor propping up demand for UK property among overseas buyers is not wrong – but it is too simplistic. The fall in sterling will have played a role at the margins. But the strength of …
21st October 2016
According to today’s RICS construction survey, both current and expected activity improved on the second quarter’s poor showing. But with the industrial and private commercial balances both below the all-sector average, the survey implies that developers …
20th October 2016
The pace of job creation slowed a little in August, but there was little in the data to suggest that a slump in occupier demand or in rental value growth is imminent. … Employment …
19th October 2016
If permanent, the trend towards higher density occupation in London’s office market points to an increased risk of oversupply arising from new construction. Yet at the same time, that trend should also curb the amount of space released by a contraction in …
14th October 2016
Investment activity rose markedly in September, driven in large part by overseas investors taking advantage of the lower exchange rate. Yet, while this gives weight to our view that the trough for activity is probably already behind us, we do not expect a …
11th October 2016
Based on past form, equity prices point to an adjustment in all-property capital values of around 11%in the London, and 13% in the non-London markets. However, with the economy looking to be on a solid footing, and pricing much less stretched than in …
7th October 2016
September’s construction PMI surpassed market expectations. That said, the bulk of the improvement came from the civil engineering and housing segments, while activity in the commercial sector only improved marginally. … CIPS/Markit Construction PMI …
4th October 2016
At minus £325m in August, the fall in net lending to the property sector onlyreversed a small part of the previous three months’ gains. And with the initial fears that the out-vote would lead to a collapse in property values now starting to recede, …
29th September 2016
With employment growth set to slow, the rental outlook in the main Scottish office markets is muted. Encouragingly, however, office property pricing in Edinburgh and Glasgow is considerably less stretched than London or the non-London average, thus …
28th September 2016
August was a slow month for the commercial property sector. However, the worst fears about a deep recession seem to be dissipating, and overseas investors have been undeterred by the post-referendum uncertainty. Thus we think that the largest capital …
23rd September 2016
Forward-looking aspects of industrial and manufacturing surveys have acted as a fair lead indicatorfor industrial yield movements three and six months ahead. And, with the initial post-referendumshock now seemingly behind us, they suggest that, at least …
22nd September 2016
The first release to include post-referendum jobs data suggests that jobs growth is proving resilient. Nevertheless, job creation is likely to slow in the months ahead, but occupier demand is unlikely to collapse and rental values should be supported. … …
14th September 2016
Commercial property investment slumped again in August as the market continued to absorb the implications of June’s vote to leave the EU. But with the preliminary evidence seeming to back our view that a recession will be avoided and interest rate …
12th September 2016
The UK’s decision to leave the EU has weakened the economic outlook for the euro-zone and increased expectations that the ECB will keep monetary policy looser for longer. While slower economic growth is negative for the property rental outlook, the …
9th September 2016
The outlook for rental and capital values, as well as total returns, was down graded in August’s consensus forecast. Yet with the spectrum of forecasts now much wider, and the prospects of a significant recession looking slimmer, we are comfortable to sit …
5th September 2016
August’s construction PMI built on yesterday’s encouraging news from the manufacturing sector. A sharp improvement, recovering most of July’s decline, suggests that confidence in the construction sector is already starting to shake off the referendum …
2nd September 2016
Rising by £123m in July, net lending from banks and building societies to the property sector held up in the wake of June’s EU referendum. Moreover, banks and building societies have relatively low exposure to property at present, and they showed no …
30th August 2016
Some commentators have touted the recent fall in sterling as a ray of light for hotels and central London retail. However, we think that any uplift to occupier markets will be modest, as the depreciation is unlikely to drive a surge in arrivals, and …
The fall in the exchange rate as well as policy makers’ response to the referendum result have helped property look more attractive relative to gilts and equities. Thus, if we are right in thinking that the economy and occupier demand should hold up …
25th August 2016
The prospect of a further prolonged period of ultra-loose monetary policy suggests that government bond yields are set to remain markedly low for a long time yet. Admittedly, we think Treasury yields will rise as the US Fed tightens policy sooner and by …
22nd August 2016
We have cut our forecasts for UK Commercial Property since our previous Analyst to reflect the heightened uncertainty resulting from the vote to leave the EU. In addition to penciling in a modest rise in yields, we have also trimmed our rental forecasts, …
19th August 2016
Employment growth was strong in the three months before the referendum. Even so, there are good reasons why rental value growth is likely to slow further in the second half of the year. … Employment …
17th August 2016
Equity market volatility can be a proxy for economic uncertainty which, in turn, should anticipate movements in all-property yields. This relationship suggests that, given the heightened uncertainty on the back of the EU referendum, all-property yields …
16th August 2016
Relative to their past peaks and underlying trends, rents are only worryingly high in London’s retail market. While that would not prevent large falls if the economy were to suffer a full-blown recession, it does reduce the chances that the short-term …
12th August 2016
Unsurprisingly, on the back of the UK’s vote to leave the EU, commercial property transaction activity fell sharply in July. That said, with no signs of an exodus from London, and overseas investors taking advantage of the weaker exchange rate, activity …
10th August 2016
As expected, the MPC today voted to cut Bank Rate by 25bps to 0.25% and to restart its asset purchase programme. This should underpin the recent movements in sterling, gilt yields, and equities, and help to counter any concerns about the rental outlook, …
4th August 2016
Today’s commercial construction PMI added to the evidence showing how negative sentiment towards the commercial property sector has become. However, if we are right that the economy will avoid a recession, sentiment is more likely to recover gradually …
2nd August 2016
While the outcome of the referendum has certainly dampened the sector’s mood, we believe that policymakers’ response should help allay some of the worst fears. We think that the lower exchange rate and the expectation of lower interest rates should help, …
29th July 2016
Even though net lending to property rose in June, we would hesitate to read too much into today’s figures. That said, despite the uncertainty caused by the referendum, lenders look less exposed than before the 2008 crash, and this should help mitigate the …
