Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
For many years we have argued that UK markets were pricing in too early and too fast a tightening of monetary policy. But now, markets, which currently expect the MPC to leave interest rates on hold for at least another year and to take more than a decade …
27th August 2015
The pace of commercial property capital value growth eased again in July. But as the contribution from yield compression continues to fade, that was always to be expected. More encouragingly, there is little sign that the rental recovery is running out of …
Yesterday’s sharp falls in global equity markets and the value of UK real estate equities have not altered the outlook for the UK commercial property market over the next year or so. Commercial property values are likely to grow at a rather slower pace, …
25th August 2015
Investor demand for UK property shows few signs of waning. So with yields edging lower and occupier market fundamentals strong, the market is unlikely to slow materially in the second half of this year. However, with room for further yield compression …
18th August 2015
The slump in investment market activity in July was largely seasonal and needs to beseen in the context of June’s exceptional strength. As a result, there is little in thedata to suggest that the appetite for UK property is moderating. … Commercial …
17th August 2015
The gap between prime and non-prime yields has fallen in seven of the past eight quarters and by roughly a third over that period. Yet there is little in this data to ring alarm bells. After all, unlike in the mid-2000s, the latest data do not suggest …
13th August 2015
From a property perspective the latest dip in job creation needs to be offset against the corresponding rise in productivity and profits that it implies. And if we are right that the falls in employment will be reversed in due course, they should not have …
12th August 2015
Distribution warehouse rental value growth hit 2.9%y/y in Q2, a 15-year high. But with output in the distribution sector growing at above-average rates and real rental values more than 10% below a simple trend, we see little reason to expect a major …
6th August 2015
Activity rates in the commercial construction sector inched up in July, but are well below the levels that were typical in the middle of last year. However, with the outlook for occupier demand still solid and availability deteriorating in most sectors …
4th August 2015
The latest data on the commercial property sector offer few signs that values are approaching a peak, or even a plateau. A decent economic backdrop is supporting occupier demand and rental value growth and with investor appetite still robust, yields are …
31st July 2015
The latest upturn in construction sector workloads is encouraging. Yet such headline survey measures almost certainly overstate the contribution that the sector is likely to make to the wider recovery over the next few quarters, as well as the speed at …
30th July 2015
The spread between government bond yields in Germany and the UK is less indicative of the relative strength of the two countries’ economic outlooks than it was in the past. As such, in contrast to most of the last 15 years, the spread between German and …
29th July 2015
July’s Colliers/REC pricing survey contained evidence of a more cautious tone among the survey’s respondents. For one thing, for the first time in several years, a sizeable minority thought that it was a good time to sell London offices. Meanwhile, cuts …
With capital values buoyant, investor sentiment strong and reports that availability is becoming a pressing issue in many markets, June’s drop in net property lending is unlikely to be a sign that the lending environment has soured. It is more likely to …
Shopping centre rental values have yet to find a floor. But with rental values for in-town centres still struggling, while out-of-town rents appear to be staging a recovery, the data are most useful as a reminder of how polarised the retail property …
20th July 2015
Today’s employment data present the first fall in employment for two years. However, the broader trend is one of improvement in the labour market. In particular, strong earnings growth is likely to benefit the retail sector. … Employment data …
15th July 2015
Non-mainstream sectors took centre stage in another bumper month for property investment in June. Six deals involving petrol stations, hotels, leisure and student housing accounted for half of the £8.7bn total of deals struck. … Commercial property …
9th July 2015
As we move into the second half of the year, it seems a good time to review our 2015 forecasts and to assess whether they could yet be knocked off track by the ongoing saga in Greece. Fortunately, even after yesterday’s vote, the risks of a major downside …
6th July 2015
The latest CIPS/Markit construction PMI shows that supply in the commercial property sector is now rising at its fastest rate since 2008. But with most evidence also suggesting that availability is deteriorating rapidly, there is little danger yet of a …
2nd July 2015
April’s rise in net lending to the commercial property sector was more than reversed in May. But the small rise in development lending activity suggests that confidence in the lending environment is still improving. Thus further gains in overall net …
29th June 2015
Development activity in the industrial property sector has picked up sharply over the past year or so in response to a doubling in the pace of industrial rental value growth. But with the economy set to grow by between 2.5% and 3% for the foreseeable …
25th June 2015
The prevailing view in the markets that the MPC can raise interest rates extremely gradually over the coming years seems right to us. Granted, wage growth has begun to pick up and the Fed looks set to start raising interest rates from September. But we …
For a given rate of economic growth, boosting productivity requires a slower rate of job creation, which in turn will tend to moderate the rate of rental value growth. Over the medium term, however, any short-term softening in occupier markets would be …
18th June 2015
Employment rates are already at record highs, so the moderation in the pace of job creation in the three months to April is not an obvious cause for alarm, especially as the data show a healthy spread of new creation across sectors and regions. … …
17th June 2015
Offices accounted for the lion’s share of UK commercial property investment activity in May, and drove almost half of the increase from April. However, it was also notable that investor appetite for non-mainstream property, and in particular student …
11th June 2015
Taking 2015 to 2017 as a whole, further yield compression combined with steady growth in rental values should mean that South East offices deliver stronger capital value growth and average total returns than any of the main IPD sub-sectors. … South East …
9th June 2015
The surge in leisure services spending shown in the latest data is not as positive for the broader leisure sector as it first appears. Nevertheless, after tracking sideways for the past six years, the conditions are now in place to allow leisure rental …
5th June 2015
The stock of commercial property debt rose marginally in April, ending a run of 27consecutive monthly contractions. The data thus echo the recent DeMontfortfindings which suggest that the property lending environment has turned a corner. … Lending to …
2nd June 2015
May’s IPF Consensus survey shows that most forecasters now recognise that the commercial property market has more momentum than they previously thought. Yet despite the latest upgrades, we suspect that the Consensus is still too cautious about the outlook …
29th May 2015
The De Montfort University Lending Survey confirms anecdotal reports of an increasingly buoyant and competitive commercial property lending market. But it also suggests that lenders’ risk appetite is limited, with development finance and smaller ticket …
22nd May 2015
Schemes aiming to deliver a total of 4.4m square feet of new office space to Central London were launched in the past six months. That was the second highest level of development starts in 20 years. Nevertheless, there is little immediate risk that the …
21st May 2015
The outlook for the commercial property market is favourable and the recovery is likely to be extended over the forecast horizon. Yields will play a role by continuing to edge down, but consistent with the favourable prospects for economic growth and job …
18th May 2015
The start of the year has seen further improvement in the labour market, with unemployment falling further and real pay now growing strongly. This suggests that the positive momentum in rental value growth will be sustained. … Employment data …
13th May 2015
The value of commercial property deals struck in April slumped by 54%m/m. But the bulk of that decline can be accounted for by the fact that March’s total was boosted by two huge one-off deals. In fact, April’s total was only just lower than the figures …
11th May 2015
Gauging the impact of safe-haven demand on the pricing of Central London property is not easy and any estimates carry sizeable health warnings. But we think it is plausible that Central London office and retail yields incorporate a safe-haven premium that …
8th May 2015
April’s dip in the commercial construction PMI could be a sign that developers sense that the recovery in occupier demand is fading. But such a conclusion seems premature to us. Therefore, it is possible that slower growth in new supply will act to …
5th May 2015
The economy slowed in the first quarter of the year, but survey evidence typically indicates that activity and confidence strengthened again in March. Moreover, although core inflation took a step lower in March, there are few signs that consumers are …
29th April 2015
In contrast to this morning’s GDP data, the RICS commercial property survey implies that business confidence and activity levels are healthy. At the margin, this adds weight to our view that the slowdown in GDP in Q1 will prove temporary. … RICS …
28th April 2015
At face value, the RICS construction survey appears to show that commercial property development is expanding strongly, even if it did moderate a touch during the first quarter. Yet the improvement is coming off a very low base and activity levels on the …
23rd April 2015
The record low spread between industrial yields and the all-property average is not a sign that industrial property is too expensive. Rather it largely reflects the fact that retail yields are still comparatively high. If anything, relative to offices, …
22nd April 2015
The labour market has regained considerable momentum following the slowdown in the second half of last year. Accordingly, the demand for commercial property space, and thus rental value growth, is only likely to increase. … Employment data …
17th April 2015
The latest snapshot of investment activity offered no evidence that the uncertainty surrounding May’s general election is deterring investors away from UK commercial property. … Commercial property investment …
14th April 2015
A comparison with previous upswings suggests that commercial property capital values will peak within the next six months. Yet property is not obviously overvalued while occupier fundamentals are both strong and improving. So unless a major shock were to …
9th April 2015
The construction PMI moved down to 57.8 in March, meaning that it has reversed the gains made over the first two months of the year. Nevertheless, the rise in the future business expectations index to its highest level since 2006 suggests that a strong …
3rd April 2015
The latest Colliers/Real Estate Capital survey shows that forecasts for capital values in 2015 and 2016 are notably higher than in November’s survey. Accordingly, despite the already low level of yields, the survey’s respondents believe that the property …
1st April 2015
The latest data from the Bank of England offered further evidence that the commercial property lending market has turned a corner and is no longer acting as a significant headwind for the wider property market. … Lending to commercial property …
31st March 2015
The economy moved closer to deflation in February as headline CPI inflation fell to zero. In principle, falling prices could undermine the recovery as consumers defer spending. But, deflation is unlikely to become entrenched and recent retail sales and …
25th March 2015
For many Europeans, the cost of visiting the UK has jumped by almost 20% over the past 18 months and almost 10% since Christmas. Yet the evidence shows that currency shifts have a negligible impact on visitor numbers or hotel capital values. Thus, we see …
19th March 2015
Today’s employment data offer additional encouragement for commercial landlords, adding further weight to the idea that occupier confidence is high and that there is little sign that expansionary plans are being reined in. … Employment data …
18th March 2015
Although sterling has shot up by nearly 5% on a trade-weighted basis since the start of the year, there are several impediments to a further significant appreciation over the coming months. The strength of the US labour market suggests that interest rates …
17th March 2015
