Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Overpricing is a more salient concern for London’s property markets than at the national level. However, there are cyclical and structural factors that currently support more aggressive pricing in the capital. Moreover, we have found little evidence to …
1st March 2016
Banks and building societies reduced their net loans to the commercial property sector in January. However, with banks and building societies’ exposure to commercial property holding fairly constant over recent months, we think that lending to property is …
29th February 2016
Compared to the Consensus, our forecasts are skewed towards the bullish end of the spectrum. However, given that we think that economic growth and occupier fundamentals will hold up well and that monetary conditions will stay accommodative for some time …
26th February 2016
The key economic indicators released this month highlighted that job creation and retail sales have been solid. Despite nominal wage growth softening further, near-zero inflation continues to boost real wages. However, the yield on 10-year gilts fell to …
25th February 2016
We think that recent fears about a global slowdown, and hence the reaction in financial markets, have been overdone. In fact, we expect global growth to accelerate this year and the prices of most commodities to recover, partly as a consequence of better …
19th February 2016
The turbulence in commodity and equity markets since the turn of the year has intensified concerns about the outlook for commercial property in the UK. And the longer the market dislocations persist, the greater the chances that they will spill over into …
Healthy job creation continues to bode well for occupier demand conditions. Moreover, with job vacancies high, it is likely that we will see further gains in employment this year, making a sharp slowdown in rental growth unlikely. … Employment …
17th February 2016
Commercial property transaction activity was muted in January. Encouragingly, however, sentiment towards UK property seems healthy. And if we are correct about the UK’s positive macroeconomic fundamentals, it is unlikely that we will see a collapse in …
12th February 2016
Last month’s jump in commercial property construction activity was more than fully reversed in January. While market turmoil and the spectre of the EU referendum may be holding back some commercial construction, supply shortages and robust rental growth …
2nd February 2016
In net terms, banks and building societies boosted their loans to the commercial property sector in December. However, the increase in net lending applied only standing investments, not new development, implying that lenders are still cautious. … …
1st February 2016
The recovery in rental value growth has continued to plateau. This, however, does not imply that rents are due to correct as the positive economic outlook and supply shortages should underpin rental values. With yield impact fading, capital value growth …
27th January 2016
The RICS commercial property survey reported that occupier demand moderated but remained positive in the fourth quarter. Yet even if the dip in demand is sustained, supply shortages are likely to support rental value growth for some time. … RICS …
26th January 2016
The recent slump in real estate equity prices appears to be signalling that a 6% fall in all-property capital values could be in store for H1 2016. However, we are confident that job creation and muted inflationary pressures will underpin our …
22nd January 2016
Jobs numbers continue to point to improving occupier demand. That said, the regional breakdown of employment is uneven and it suggests that occupier markets and rents in the North West look well-placed to outperform. … Employment …
20th January 2016
Despite a fall in construction activity in the fourth quarter, workload balances in the commercial sector are solid. Expected work balances, which are above the survey’s average, combined with the UK’s fairly healthy growth and employment prospects, imply …
14th January 2016
Commercial property investment in December was subdued. This is in line with our view that the most vigorous rates of activity probably now lie behind us. However, with a benign rate outlook and further economic growth and job creation expected, …
The turn of the year has brought with it renewed uncertainty around the prospects for the UK and the world economy and we have nudged down our UK economic growth forecasts as a result. But the domestic economy and labour market should hold up well so that …
12th January 2016
Last month’s jump in activity in the commercial property sector helped to reverse November’s dip in overall construction activity and suggests that the supply pipeline is continuing to grow. Yet the improvement is coming off a low base and the risks of a …
5th January 2016
The deleveraging process within the commercial property lending market showed no signs of abating in November. In fact, the stock of outstanding debt to commercial property fell by almost £1bn during the month. … Lending to commercial property …
4th January 2016
The upswing in the rental recovery seems to be close to its peak. This, however, does not imply that rents are set to correct as the positive economic outlook should continue to underpin rental growth. With yield impact fading, capital value growth is …
23rd December 2015
Combining a simple assessment of relative yields with the outlook for job creation, and thus occupier demand, suggests that Leeds and Bristol are the two non-London markets with the most upside potential for capital value growth. … Where are capital …
18th December 2015
Today’s jobs numbers surprised on the upside, implying that after a summer lull occupier market conditions are improving once more. However, the sectoral breakdown suggests that job creation has been uneven and office space has been the main …
16th December 2015
Experience shows that there is little direct relationship between all-property yields and Bank Rate. And with little prospect of a marked deterioration in occupier market conditions, next years’ increases in Bank Rate are unlikely to trigger a property …
15th December 2015
October’s surprise jump in UK commercial property investment was not sustained. The value of investment fell markedly in November and is likely to continue on a downward trend as investor demand returns to more normal levels. … Commercial property …
11th December 2015
December’s Colliers/REC pricing survey signalled that, with the gap between prime and secondary yields narrowing, the survey’s respondents have become more selective in terms of sector and location. That said, the survey highlights that while we are in …
4th December 2015
At a glance, November’s Construction PMI provided few positives for commercial development activity. However, with reports of falling availability, and rents still rising, it is likely that the deterioration in development will be short-lived. … …
2nd December 2015
Lending to commercial property in net terms contracted in October, in line with lending to the economy as a whole. Indeed, banks’ exposure to the sector continues to fall, with lending to development and standing investments both receding last month. … …
30th November 2015
Our forecasts put us towards the high end of the current Consensus. However, given our view that productivity will deliver a positive surprise, helping to keep interest rates and property yields low, that is a position we are happy to hold. … IPF …
27th November 2015
With little additional detail on business rates, and the Starter Homes Initiative simply a restatement of a policy announced last year, Help to Buy London and the Chancellor’s latest assault on BTL landlords are likely to be the main talking points of …
25th November 2015
The upswing in the rental recovery continues to gather pace. But, offsetting this, the contribution of yield impact is steadily falling and capital value growth slowing. With little to suggest an imminent rise in UK interest rates, we see little scope for …
24th November 2015
The strength in headline retail sales volumes is at odds with shopping centres’ poor rental performance. This is due to the fact that sales of items that form the core of shopping centres’ offering have underperformed. Excluding such items suggests that …
19th November 2015
The commercial property market seems to be at a point of transition, which will be characterised by yield-driven gains in capital values giving way to capital value growth that is driven largely, if not solely, by rental values. The result will be a …
18th November 2015
Financial markets still do not expect interest rates to rise until the end of 2016. While we agree that interest rates will rise very slowly, we expect the first rise to come sooner, probably in the middle of next year. After all, the MPC’s Inflation …
17th November 2015
Construction in London rose sharply over the last six months. That said, fears about oversupply in London’s office market overlook the fact that completions do not deliver a one-for-one rise in stock. … London’s growing office pipeline not (yet) a cause …
12th November 2015
Today’s jobs numbers were slightly higher than we had expected implying that occupier market conditions are still healthy. Indeed, today’s jobs numbers are broadly consistent with our rental growth expectations of around 3.8%y/y. … Employment …
11th November 2015
Commercial property investment rose significantly in October ending three consecutive months of declines. However, it is unlikely that this spike in investment will continue in the months ahead as the latest data were skewed by a few large deals in …
9th November 2015
The RICS commercial property survey highlights that supply is responding to occupier market conditions. Yet new supply will take time to deliver a material change in availability. Meanwhile, rents are likely to remain on a rising trajectory. … RICS …
3rd November 2015
The slowdown in commercial construction seen earlier this year is now firmly in reverse. That implies that confidence in the economic recovery and the occupier market outlook among developers is solid, giving weight to our view that the rental recovery …
In net terms, loans extended to commercial property rose in September. While, traditional lenders’ exposure to property seems to be reaching more manageable levels, the data continues to show banks’ aversion to financing new developments. … Lending to …
29th October 2015
Relative economic competitiveness scores go some way to explaining UK pricing in a pan European context. Yet while prime all-property yields look about 50bps lower than the UK’s competitiveness score alone would imply, this is because pricing also …
27th October 2015
Reflecting weaker occupier demand conditions, total returns in 2015 are likely to undershoot our forecast from last year. However, falling yield spreads against standard shops and a shrinking pipeline should mean total returns will realign with our 5-year …
23rd October 2015
22nd October 2015
The impact of the National Living Wage (NLW) will be largest in the retail, leisure and hotel sectors. But even there, increased labour market flexibility should ensure that its introduction has little impact on the recovery in occupier demand. … National …
15th October 2015
Jobs numbers continue to point to healthy occupier demand conditions. And although the pace of job creation in London has cooled, demand fundamentals in the regions still looks solid. … Employment …
14th October 2015
The Q3 Credit Conditions Survey reported the strongest pick-up in secured residential credit availability in two years. But at the same time, the availability of credit for the commercial sector remained weak, suggesting that lenders are increasingly …
13th October 2015
Commercial property investment fell for a third consecutive month in September, recording its lowest level in 16 months. This is likely to be a signal that investor demand has returned to more normal levels. … Commercial property investment …
9th October 2015
If occupiers continue to require less office space per employee, our supply concerns about London’s office market would increase. However, with economic conditions and confidence improving over the next few years we are likely to see an increase in the …
6th October 2015
The slowdown in commercial construction activity that we saw earlier this year appears to be unwinding. That implies that confidence in the economic recovery and the occupier market outlook among developers is solid. As such it seems to accord with our …
2nd October 2015
Some forecasters are expecting commercial capital values in the UK to fall sharply in 2017 with an implied yield expansion of up to 120bps. This is unlikely unless we have significantly underestimated inflation pressures in the economy and, as a result, …
1st October 2015
The City of London is the part of the property market with most to lose if the UK electorate votes to leave the EU. Yet even there, the potential for services exports to fast-growing emerging markets to replace any lost trade with Europe means that the …
30th September 2015
