Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
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 …
22nd November 2016
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 …
The pace of construction activity fell across the board in the second quarter. That said, skill shortages mean that activity in the sector had been losing momentum for a year, so we would be reluctant to lay all the blame at Brexit’s door. … RICS …
28th July 2016
The latest RICS Commercial Property Survey gave fresh evidence that sentiment in the property sector has deteriorated since June’s referendum. … RICS Commercial Property Market Survey …
25th July 2016
Our central view is that the outlook for commercial property is healthier than the recent gloomy headlines would suggest. Nevertheless, there is a latent risk that negative sentiment itself could become self-fulfilling. If this is the case, then a flurry …
22nd July 2016
Job creation was healthy in May, reflecting strong labour demand prior to the referendum. And while these figures seem to bode well for property, we would not give them too much weight as lower confidence and employment growth will probably feed through …
20th July 2016
Lenders reported a small drop in secured credit availability to households in the second quarter. But the availability of debt for commercial property fell sharply, and the outlook for Q3 looks equally negative. … Bank of England Credit Conditions Survey …
13th July 2016
June’s investment data showed steady transactional activity compared to May. But this reflects the final month before the impact of the referendum result is felt. Accordingly, with commercial property sentiment softening and uncertainty reigning, we …
12th July 2016
The outcome of the vote has dented the outlook for occupier demand, and as a result we have cut our all-property rental value growth forecasts for the next two years, from 2.9% and 2.4% respectively, to 2.5% and 2%. That said, with interest rates expected …
6th July 2016
In the wake of the referendum result, some property funds have reacted by cutting the value of their assets, and even stopping fund outflows. However, by limiting outflows, funds can allow the dust to settle and stop fire sales from triggering the …
5th July 2016
The commercial construction PMI fell to its lowest level since mid-2009 in June. This highlights the extent to which the uncertainty around the EU referendum was weighing on developers’ activity. The result of the referendum would have done little to …
4th July 2016
The outlook for London’s office market is undeniably weaker than it was just 10 days ago. But although we have cut our forecasts in response to last week’s vote, we think there are reasons to believe that some of the most gloomy predictions may have …
1st July 2016
Net lending to property increased in May, reversing much of April’s losses. And the fact that development lending registered its first material rise since 2011 can be seen as a sign that traditional lenders were becoming more comfortable extending credit …
29th June 2016
Victory for the Leave campaign in yesterday’s EU referendum clearly poses some downside risks to the commercial property market outlook in the UK. Yet we think that fears that the result will trigger a correction in the market seem overly pessimistic. … …
24th June 2016
