Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
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
Experience suggests that the recent upturn in consumer confidence and retail sales could drive a rapid recovery in high street rental values over the next year. But given the huge supply overhang in many local markets and the fact that the influence of …
12th March 2015
The number and value of UK commercial property deals both dropped for the second month running in February. Yet safe haven demand appears strong and investors are increasingly looking beyond the mainstream markets. Thus the data support our …
11th March 2015
The construction PMI inched up in February, meaning that it has now reversed a large part of the slowdown recorded at the end of last year. While new orders expanded at decent pace, rising input cost pressures could act as a brake on activity. … …
3rd March 2015
The latest IPF Consensus expects UK property yields to fall a little further than was previously envisaged. As a result, the Consensus forecasts for capital value growth and total returns have both been pushed up a touch since November’s survey. We agree …
27th February 2015
The economy has begun the year on a fairly bright note. Surveys of business and consumer confidence have turned up and recent data confirm that the labour market ended 2014 in good health. Even so, the slump in inflation has increased the chances that …
25th February 2015
Today’s data from the labour market offer further encouragement for the commercial property market. In particular, the high level of vacancies indicates that most firms are still in an expansionary mood. The fact that the bulk of new jobs are full-time, …
18th February 2015
We have raised our forecasts for commercial property returns compared to our previous Analyst and now expect the market to deliver another year of double-digit returns in both 2015 and 2016. … Another year of double-digit …
17th February 2015
While yields in most of the UK property market fell further in the final stages of last year, yields for Central London shops edged up. However, they are already exceptionally low relative to their own past and to other sectors. Thus, it seems …
12th February 2015
At 19.3% IPD all-property returns for 2014 were roughly double the consensus forecast made in late 2013. Both we and the consensus expect returns to moderate, to around 10% this year, as the pace of yield compression slows. However, the strength of both …
5th February 2015
Having eased in the previous three months, the pace of construction activity in the commercial property sector inched up in January, suggesting that output rates in the sector are stabilising at healthy levels. … CIPS/Markit Construction PMI …
3rd February 2015
Net lending to the commercial property sector contracted again in December. But the pace of the contraction appears to be easing, perhaps a sign that an end to the deleveraging process may now be in sight. … Lending to commercial property …
30th January 2015
Recent business surveys which suggest that the economy may be starting to cool may be misleading given that these same surveys have recently overstated the economy’s strength. Indeed, steady growth in employee jobs and hours, as well as the positive …
26th January 2015
The latest sharp drop in the pace of job creation was driven largely by a drop in self-employment. And given that total hours worked and the number of vacancies all continued to rise at a healthy pace, there is little to suggest that a slowdown in rental …
22nd January 2015
Today’s CBI/PWC financial services sector survey appears to contain mixed messages for the Central London office markets. But any adverse impact on occupier demand from the drop in employment and employment expectations should be offset by high levels of …
19th January 2015
Today’s RICS survey shows that activity in the construction sector softened a touch at the end of last year. However, forward-looking aspects for the survey suggest that construction firms still have an optimistic view of the year ahead, which is …
12th January 2015
Confirmation that the major supermarket chains are actively trimming their current and planned property portfolios supports our view that the sector will underperform for some years yet. But it also makes it increasingly likely that capital values will …
8th January 2015
Activity rates in the construction sector eased again in the final weeks of last year. Nevertheless, the PMI survey suggests that the supply of commercial property is growing steadily and that some of the upside risks to our forecasts for rental values …
5th January 2015
The economy is showing few signs of slowing in response to the weaker global backdrop. Admittedly exports did fall in the third quarter, but this was offset by strong domestic demand to leave GDP growth at 3% in annual terms. Business surveys suggest that …
22nd December 2014
To date in 2014, net institutional investment in property has totalled £4bn. Although the rate of net investment now appears to be easing, that could well prove temporary. And with strong economic fundamentals, property values should continue to be bid up …
19th December 2014
Office-based employment dipped in the third quarter. But with annual growth already running well ahead of the whole economy average, the outlook for office occupier demand and rental value growth is still pretty positive. … Workforce jobs …
17th December 2014
UK markets have taken the meaning of the word “gradual” in the Monetary Policy Committee’s forward guidance on the pace of interest rate rises to a new extreme. Overnight index swap rates imply that markets think that the MPC will wait another year before …
15th December 2014
Property transactions seem to have hit a plateau, supporting our view that we may be very close to the peak for capital value growth. What’s more, the share of deals accounted for by overseas buyers has also shown signs of moderating in recent months. The …
10th December 2014
The latest Colliers/Real Estate Capital survey contained further evidence that the current, yield-driven upturn in capital values is likely to slow next year. After all, there are signs that non-prime yields have a lost a little momentum and most survey …
2nd December 2014
The commercial property construction PMI fell for the second month in a row in November. But that does little to alter the picture of a strengthening occupier market. Today’s better mergers and acquisitions (M&A) data also add to an optimistic outlook for …
Net lending to commercial property dropped to an 11-month low in October, indicating that, although gross new lending flows may be improving, the overall stance of credit conditions in the sector is likely to be restrained for some time yet. … Lending …
1st December 2014
The UK commercial property forecasting community thinks that rental values will rise every year until 2018 and by an average of about 2.5% p.a. But presumably reflecting expectations of a continued monetary policy tightening cycle, property yields are …
28th November 2014
The drop in yields has been such a crucial driver of commercial property capital values over the past year or so, that rental growth will only partially fill the void, if as we expect, yields find a floor next year. Capital value growth will therefore …
26th November 2014
All-property rental values grew by 0.3%m/m in October, boosting the annual growth rate to 2.7%, its highest level since April 2008. Of particular note in October was that Rest of South East office rental growth rose to 5.8%y/y, a 13-year …
20th November 2014
Rental growth for non-prime regional offices is building up a nice head of steam, reflecting strong occupier demand and falling availability. Admittedly, a rise in the supply of new space next year may take some of the heat out of these markets. But the …
19th November 2014
There was little in today’s IPD/BPF/ Strutt & Parker Lease Events Review that should be of undue concern to commercial property investors. Indeed, perhaps the most noteworthy aspect of the report was that short leases no longer seem to preclude a …
13th November 2014
Since the previous Analyst , we have slightly increased our projection for 2014 all-property capital value growth from 12% to 14%. But as yields find a floor next year, the forecast that capital values will rise by 4% in 2015 and by a rent-driven average …
10th November 2014
Today’s RICS survey contained a raft of positive occupier market indicators, which send a clear message that rental value growth will continue to accelerate. … RICS Commercial Property Market Survey …
6th November 2014
After a multi-year high in September, the CIPS/Markit commercial property construction PMI eased down again in October. But it remained at a high level and indicates strong confidence in the prospects for occupier demand. Indeed, we believe that the …
4th November 2014
A range of recent data supports our forecast that commercial property capital values will continue to rise next year. Indeed, even if modestly higher interest rates in 2015 do start to push up property yields, the scope for solid rental gains should …
30th October 2014
Net commercial property lending was negative again in September. We think positive figures are now in sight, but also that lending activity is unlikely to boom. … Lending to commercial property …
29th October 2014
All-property rental values grew by 0.4%m/m in September, the second-biggest monthly increase since mid-2007. Industrial and office sector rental values continued their recovery, but perhaps the most noteworthy aspect of September’s data was the increases …
24th October 2014
Strong readings from today’s RICS construction survey confirm that commercial property developers’ confidence about the prospects for occupier demand is high. We agree that the outlook for the occupier market is healthy and expect rental value growth to …
23rd October 2014
History shows that upswings in London and South East office rents tend to filter out pretty quickly to the rest of the country. And with the economic recovery entrenched and regional office-based jobs growth strong, nascent growth in Rest of UK office …
16th October 2014
Over the past 30-35 years, supermarket property total returns have averaged more than 11% p.a., better than any of the other main segments. However, this long period of outperformance has now left rental values looking high and yields low. Combined with …
14th October 2014
The results of the latest CBI/PwC Financial Services survey were positive for the commercial property market. Business activity is improving steadily and the survey suggests that Central London office rents will continue to increase. A sharp drop in the …
6th October 2014
