Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
The CIPS/Markit construction PMI and the latest mergers & acquisitions data suggest that occupier market conditions remain testing. Accordingly, there seems little prospect of a rental value recovery this year. … Construction PMI (May) and Mergers & …
4th June 2013
Respondents to the latest IPF Consensus forecasts envisage rents and capital values holding broadly steady this year, also indicating that they think that yields have peaked. In contrast to the consensus, however, we think that yields could start to edge …
31st May 2013
Net new lending to commercial property remained negative in April and all the signs are that the deleveraging process has further to run. This may not prevent an upturn in capital values later this year, but it will limit its strength. … Lending to …
The recent surge in the FTSE 100 to just shy of its all-time high has fuelled speculation that a ‘great rotation’ of funds from bonds to equities is under way. But we struggle to see how the equity market rally will be sustained. Granted, the equity risk …
30th May 2013
The investment market was very quiet in April, with only the office sector seeing a meaningful level of activity. In turn, most of those deals were in Central London, and involved overseas buyers, especially from the Far East and Middle East. …
23rd May 2013
Over the past week or so the signs that commercial property investor confidence has picked up have continued to emerge. Any upturn in capital values is unlikely to be large or sustained until a widespread rental recovery begins, which does not look likely …
20th May 2013
The latest RICS survey suggests that occupier demand is rising gently and that rents may be about to turn a corner, albeit with the retail sector continuing to lag. These data bolster our expectation that a mild recovery in all-property capital values …
14th May 2013
The main messages of our commercial property forecasts have not changed materially since the previous Analyst . At the all-property level, capital values are more or less at a floor and there is a good chance that growth will resume later this year or in …
13th May 2013
We sense that property investors are poised for an upturn but not yet confident enough to become fully active again. One thing we will be watching for as a sign that a turning point has been reached or passed is a fall in the average value of deals, …
10th May 2013
It is clearly good that the economy has avoided another recession. But the news will do little to accelerate the much-needed recovery in commercial property rental values outside London. On past form, to do that, the pace of GDP growth needs to rise much …
8th May 2013
The latest CIPS/Markit construction PMI suggests that commercial property activity has now not risen for nine months in a row. This provides yet another signal that the wider occupier market will remain sluggish throughout 2013. … CIPS/Markit …
2nd May 2013
Net lending to commercial property was negative again in March and we think that this trend will remain in place for a while yet. But the deleveraging should remain “benign”, with new lending being held low and repayments doing most of the work. … …
30th April 2013
IPD all-property rental values were flat in March, while initial yields remained steady at around 6.3%. We had expected the mild upswing in yields and downswing in capital values to come to an end in late 2012 or early 2013 and this seems to have been …
26th April 2013
The tone of the latest RICS construction survey was broadly positive. Although developers’ confidence in the prospects for property demand could not be classed as bullish, at least there are signs that rents are close to a floor. … RICS Construction …
25th April 2013
London City and West End office rents are now some 15% to 20% above their 2009 floors and the Consensus envisages that they will record similar gains in the next five years. We are more cautious. While the comparative strength of London’s labour market …
18th April 2013
The number of financial & business services (FBS) sector jobs rose to a new record high in the final three months of last year. Although the large development pipeline will act as a brake, it now looks pretty clear that Central London office rents will …
17th April 2013
Central London aside, weak economic growth and fragile business confidence are acting as a drag on occupier demand, pushing back a recovery in commercial property markets. South East offices will not be wholly immune to such factors, but with solid …
12th April 2013
The gap between industrial property yields in the South East and the Rest of the UK has risen to a level that is 50% higher than its long-run average. This could be a sign that yields in the South East are too low relative to yields in the Rest of the UK. …
9th April 2013
Credit availability to the property sector, particularly residential mortgage credit, is still rising, helped by some lenders seeking to increase their market share. But the improvement is not as marked as in recent quarters, and concerns about high house …
3rd April 2013
The tone of today’s CIPS/Markit construction PMI was downbeat. Whether we look specifically at the commercial sub-sector or the construction sector as a whole, activity has now contracted in seven of the past eight months. … CIPS/Markit Construction PMI …
In net terms, lending to the commercial property sector was negative for the fifteenth consecutive month in February. Yet progress in reducing lenders’ exposure to the property sector is slow. Thus, for the foreseeable future, a continuation of recent …
2nd April 2013
All-property rental values ticked down by 0.1%m/m in February. That was a small drop, but nevertheless the first since October last year. At the sub-sector level, perhaps the biggest break from recent performance came in the retail warehouse segment, with …
27th March 2013
March’s Colliers/Real Estate Capital survey indicates that secondary property yields edged back up in recent months, reversing the previous quarter’s fall. If anything, this has increased the short-term downside risks to all-property capital values. But a …
25th March 2013
UK-based investing institutions made modest net purchases of commercial property in the final few months of 2012, extending the pattern of the past few years. But this has not triggered a wider investment market recovery so far and there seems little …
22nd March 2013
Today’s better-than-expected retail sales data will do little to halt the polarisation in values evident in the IPD retail sub-markets. Even if this is the start of a modest spending upturn, until the problem of excess capacity on high streets is tackled, …
21st March 2013
If growing fears of a sustained rise in inflation proved well founded, this will present another obstacle to a meaningful recovery in commercial property values. But a repeat of the 1970s experience, when weak growth and high inflation pushed real values …
14th March 2013
The current IPF Consensus forecasts envisage that capital values will do little more than mark time for an unprecedented seven years. Yet this is not a sign that the property market cycle has been confined to history, rather it is indicative of how low …
12th March 2013
The construction sector has endured a terrible recession, with double-digit declines in output and employment. In theory, there is scope for a sharp comeback. But given the squeeze on credit and public sector building and the possibility of a shift in …
7th March 2013
We are wary of claims that changes in the nation’s shopping habits will drive a large, positive step-shift in the relative performance of distribution warehouses. Nevertheless, the combination of relatively favourable demand fundamentals and tight supply …
6th March 2013
Merger and acquisition (M&A) activity slumped at the end of 2012. This obviously hasn’t pulled the rug out from under the Central London office markets, but will nevertheless have been a restraint. With the economic outlook still subdued, in our view, so …
5th March 2013
The stabilisation in commercial property construction in January proved to be only temporary, with the CIPS/Markit PMI falling back to 45.5 in February, a three-year low. Given occupier demand is still fragile and development finance hard to get, …
4th March 2013
Net commercial property lending by banks and building societies was negative again in January and we doubt that this trend will come to an end anytime soon. However, at least “new” lenders, e.g. insurance firms, are becoming more active. … Lending to …
1st March 2013
Concerns about the MPC’s commitment to its inflation target, weakening expectations for UK GDP growth relative to elsewhere and the loss of the triple-A credit rating have all weakened the pound since the start of year. A further fall is clearly possible, …
28th February 2013
The rise in real consumer spending in Q4 last year was the fifth in succession and, at face value, looks favourable for retail occupier demand. It is also encouraging that the adverse effects of recent retailer failures have at least been partly offset by …
27th February 2013
Respondents to the latest IPF Consensus forecasts envisage rental value growth resuming in 2014 and then accelerating in 2015. But the implication from the capital value forecasts is that yields have a little further to rise, before sitting at a plateau …
22nd February 2013
All-property rental values were unchanged in January, leaving them 0.3% lower than a year earlier. But amidst the broad stagnation at the all-property level there were some bright spots. Notably, Rest of South East office rents increased by 0.3%m/m in …
21st February 2013
Lenders have already made substantial progress in reducing the stock of commercial property loans on their books. But there is more to do and net lending flows are likely to remain negative for some time yet. By the end of 2015, our projection is that the …
15th February 2013
All-property yields moved up modestly in 2012, in line with our forecasts, but we think that this small adjustment is now all but over. Equally, however, renewed falls in yields and rises in capital values are unlikely until late this year at the …
12th February 2013
The recent rises in UK bond yields have been far too small to make much of a dent in the already-high property/bond yield spread and, in any event, are likely to go into reverse. Indeed, we think that the UK commercial property market will take the latest …
7th February 2013
Overall construction activity edged down again in January, although the commercial property sector managed to hold steady. On past form, these data suggest that developers do not anticipate occupier demand being strong enough this year to stimulate a …
4th February 2013
Net commercial property lending was negative again in December and it seems likely that this pattern will continue for some time yet. However, it is encouraging that there remains little evidence of foreclosures and fire-sales. … Lending to commercial …
30th January 2013
Today’s RICS survey showed that occupier demand remains soft and that surveyors envisage unchanged rental values over the next three to six months. That looks plausible to us, although the risks are tilted to the downside. … RICS Commercial Property …
29th January 2013
On Property Archive data, the value of investment market activity in December rose to £3.1bn, up by £0.2bn from November. Investment in offices accounted for nearly half of this total, and the office sector saw £4bn of transactions for Q4 overall, a …
28th January 2013
Two years after the initial proposal, and having appeared to have gone cold on the idea in the meantime, the Government finally looks set to allow permission-free conversions of commercial property into residential use. This is a good move and we are …
22nd January 2013
Today’s CBI/PwC data add to other evidence that continued near-term gains in London City and West End office rents are more likely than not. But with the economy unlikely to grow to any meaningful degree until next year, medium-term downside risks to …
21st January 2013
The recent clutch of retailer failures probably won’t be the last and they increase the downside risks to rents this year. But not all retailers are struggling and recent administrations are more likely to raise the gap between rents in core and secondary …
18th January 2013
The problems of legacy loans, along with increased regulation, are both significant barriers to the Funding for Lending Scheme (FLS) boosting new commercial property lending. But there are signs that the FLS is helping wider corporate lending, which, …
16th January 2013
Anecdotal evidence suggests that there has recently been a rise in the number of tenants deciding to migrate away from the West End office market because of high occupation costs. It is difficult to see this being a catalyst for a collapse in West End …
8th January 2013
Net commercial property lending was negative again in November, taking the run of sub-zero readings to 12 months. Credit availability may improve a little in the coming quarters, but with the economic outlook still weak and borrower demand subdued, a …
4th January 2013
The tone of both of today’s commercial property data releases was downbeat. Although the latest Bank of England survey showed that credit supply in the sector has improved slightly, borrowers are not rushing to take on new loans. Meanwhile, new commercial …
3rd January 2013
