Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
For the 11th quarter of the past 12, Q3 saw UK-based investing institutions make net purchases of commercial property. However, institutions’ allocations to the sector remain very low by past standards. That might point to the potential for institutions …
20th December 2012
All-property capital values fell by 4% in the year to November, with adverse yield impact accounting for about 3%-points of that decline. Central London offices continue to outperform, with shopping centres and Rest of UK offices underperforming. However, …
19th December 2012
The number of financial & business services (FBS) sector jobs hit a fresh record high in Q3. For now, we continue to pencil in falls in City and West End office rents in 2013. But the persistent strength of FBS jobs is a clear upside risk to that view. …
12th December 2012
Rather than the direct measures announced (e.g. REIT changes), the more relevant aspect of the Autumn Statement for the commercial property sector was probably the confirmation that a strong economic recovery remains some way off. As such, broad-based …
11th December 2012
There were few surprises in this Autumn Statement, which simply represented a continuation of the existing strategy. The Statement will do little to get the economy out of its current malaise and a triple-dip remains a real threat. … Autumn Statement …
5th December 2012
The CIPS/Markit construction PMI suggests that commercial property developers have become more rather than less cautious about the occupier demand outlook, while weak mergers & acquisitions data also highlighted tough business conditions. A sustained …
4th December 2012
Our sense is that investor sentiment has improved in recent months and some are now starting to look ahead to the next commercial property recovery. Accordingly, although the current downturn is not over just yet, we think it is right to pencil in …
3rd December 2012
Respondents to the latest IPF Consensus forecasts envisage rental values beginning to edge higher next year. But with capital values also expected to drop further in 2013, the implication is that any falls in yields next year are not on many forecasters’ …
30th November 2012
Net commercial property lending was negative for the 11th consecutive month in October. However, while lenders continue to make progress on working out nonperforming loans, uncertainty and the weak economic outlook suggest that commercial property credit …
29th November 2012
The latest Colliers/ Real Estate Capital survey suggests that secondary property yields have ticked down in recent months. It is too early to be sure that this is a start of a new trend. But these data do at least add to other evidence that some investors …
26th November 2012
UK asset prices have been undermined by fading expectations of more monetary stimulus and the partial reversal of safe-haven demand as euro-zone concerns have eased. Although a cut in official interest rates now seems unlikely, we continue to expect the …
22nd November 2012
Over the past few months, the fledgling South East office occupier market recovery has continued. And given that this region has an above-average exposure to the technology sector of the economy, which is likely to outperform over the medium term, South …
The Chancellor remains hemmed in by the fiscal position. Indeed, he may well have to choose between introducing even more austerity in the Autumn Statement and letting at least one of his fiscal rules slide. … Autumn Statement 2012 …
IPD all-property initial yields were unchanged in October, but the small drop in rents meant that capital values fell further. Indeed, there have now been 12 consecutive monthly falls in capital values, with the cumulative drop over that period having …
20th November 2012
The economy is set to expand over the next year or two, but only slowly, preventing a strong rebound in property rents. Even so, investor confidence is showing signs of life and we think the current upward drift in yields will start to reverse in 2013. …
13th November 2012
The latest corporate insolvencies data were the best in more than four years and our GDP forecasts suggest that the worst may now have passed for business failures. This should help to ease investors’ concerns about the security of rental income streams, …
8th November 2012
It is no surprise to us that leisure has recently been one of the best performing segments of the commercial property market. And with consumer spending on recreational activities set to expand at a slow yet steady pace over the next year or two, combined …
6th November 2012
A modest rise in construction activity in October did not change the bigger picture of a sector that is still very subdued. And in the commercial sector, activity barely moved from the two and a half year low reached in September. … CIPS/Markit …
2nd November 2012
Measured as a share of outstanding loans, lenders’ exposure to commercial property hit a seven and a half year low in Q3. Nevertheless, credit conditions in the commercial property sector are unlikely to ease any time soon. … Lending to commercial …
29th October 2012
The results from the latest IPD/Strutt & Parker Lease Events Review, including more break clauses being exercised and the tenant default rate rising, confirm that the past year has been another tough one for many commercial property landlords. But with …
25th October 2012
Today’s RICS data suggest that commercial property developers anticipate occupier demand remaining soft, consistent with mild, near-term falls in IPD all-property rental values. We certainly agree that downside risks to rents dominate upside. … RICS …
24th October 2012
All-property initial yields edged up again in September, from 6.34% to 6.36%. As a result, capital values continued to drift lower, down by 0.4%m/m and 3.1%y/y. The drop in September was the 11th consecutive monthly fall. … Modest yield increases …
23rd October 2012
At the margin, this week’s Allsop auction results and the withdrawal of RBS from the Asset Protection Scheme (APS) both support the growing sense that sentiment towards the commercial property market may be at, or at least close to, a turning point. … …
18th October 2012
It is increasingly clear that certain types and grades of industrial property, e.g. prime distribution warehouses, are experiencing the early stages of an occupier market recovery. Given the weak economic backdrop, we doubt that this upturn will encompass …
17th October 2012
Today’s RICS survey showed that occupier demand for property remained weak in Q3 and availability rose further. Of course, that is consistent with the weak economic backdrop. To us, the downside risks to rents still dominate upside. … RICS Commercial …
12th October 2012
We doubt that any recovery in IPD all-property capital values will come quite as soon or be quite as strong as is currently indicated by real estate equity prices. But, equally, we would not be surprised to see the early signs of a recovery in physical …
9th October 2012
Although activity in the wider construction sector edged up a fraction in September, activity in the commercial sector continued to soften. That suggests that confidence in the prospects of an economic recovery and a renewed upturn in commercial property …
2nd October 2012
August was the ninth consecutive month of negative net commercial property lending flows. Unfortunately, it is hard to avoid the conclusion that tough conditions in the property lending market are set to remain in place in 2013. … Lending to commercial …
1st October 2012
On past form, the weakness of today’s CBI/PwC Financial Services Survey suggests that, over the next nine to 12 months, Central London office rental values could fall by as much as 10%. To us, that looks overdone. But it does re-emphasise the downside …
All-property initial yields edged up again in August. At 6.34%, they are now 15bps higher than the November 2011 trough. Thanks to the small fall in rents and slight rise in yields, capital values dropped by a further 0.3%m/m in August. That was the 10th …
27th September 2012
Respondents to the latest Bank of England Credit Conditions survey reported a sharp rise in the availability of mortgage finance in Q3 and expect this to continue over the next three months. By contrast, commercial property credit remains restricted. …
26th September 2012
Official data show that a run of net buying of property by UK investing institutions came to an end in Q2. And Property Archive data show that this net selling continued in July and August. Experience suggests that this is another sign that capital values …
25th September 2012
A simple projection for demand, supply and vacancy rates suggests that our forecasts for 5% falls in Central London office rents in both 2013 and 2014 remain on track. There is a risk that those falls take a little longer to materialise, but, for now, our …
20th September 2012
The current boom in Central London standard shop capital values will eventually be put into reverse by a rise in yields. The most likely catalyst for this is shaping up to be a resolution of the euro-zone crisis, a stronger global economy and a drop in …
19th September 2012
The number of financial & business services (FBS) sector jobs hit a new record high in Q2. With new development completions set to be high next year and in 2014, fresh falls in Central London office rents remain our central forecast. But the strong FBS …
12th September 2012
Property Archive’s transactions-based all-property yield recently rose to its highest level since mid-2009. However, not least because the office sector has comparatively high yields and its share of total transactions has risen, the increase in the …
11th September 2012
The latest IPF Consensus forecasts contained few revisions from the previous survey. Capital values are still expected to drop by up to 5% this year, edge a little lower next year and then start to rise again in 2014. We broadly share those views, though …
7th September 2012
For the first time since early 2010, August saw the commercial property construction PMI dip below 50. Meanwhile, mergers and acquisitions activity remained very low in Q2. As signals of continued weakness in wider business confidence, these data suggest …
4th September 2012
The latest drop in net lending shows that banks continued the process of running down their exposure to the property sector in July. But given the slow speed of the adjustment, weak lending will remain a key feature of the property market over the …
30th August 2012
The economy is now estimated to have shrunk by 0.5% q/q in Q2. But the labour market delivered better news - employment rose strongly in the second quarter. However, inflation ticked up in July, and fresh rises in domestic energy prices mean that the …
28th August 2012
While UK equity and gilt prices have both increased over the last few months, we doubt that further significant price rises are likely over the coming quarters. Equities seem destined to struggle as economic growth disappoints and profit margins are …
23rd August 2012
Commercial property capital values are likely to drop by perhaps another 5%. But that figure may now be small enough that would-be buyers are prepared to look past it and ahead to a recovery. As such, it is not out of the question that downwards pressure …
In recent quarters, out-of-town shopping centres have performed well in absolute terms and relative to their in-town counterparts. The weak consumer outlook and the growth of on-line shopping both suggest that the trend for retailers to focus on fewer, …
22nd August 2012
According to IPD, hotels are one of the few segments where capital values are at or above their levels a year ago. The continued euro-zone crisis will remain a strong headwind for hotels, but we suspect that capital values will continue to hold up well in …
15th August 2012
Our forecast that all-property capital values will fall modestly, by between 6% and 7%, from peak to trough is unchanged. The downturn in capital values that we envisage is modest in both scale and duration. But it also remains difficult to see a …
14th August 2012
Given that the economic backdrop is still so weak, it remains difficult to see a trigger for a widespread commercial property recovery in the near term. But the South East office market has shown nascent signs of life in recent months and, hence, could be …
10th August 2012
The latest IPD data confirmed that yields on the best quality property have remained resilient in the face of renewed recession, but also that lower-grade stock continues to lose value. With both tenant and investor demand likely to remain focussed on …
7th August 2012
The latest CIPS/Markit construction PMI suggests that development activity in the commercial property sector continues to increase slowly. However, with the recession not over yet, this apparent confidence in the prospects for occupier demand and rents …
2nd August 2012
The outflow of debt from the commercial property sector continued apace in June. With the economy now back in recession and banks’ exposure to property still high, the coming months look likely to see continued negative net lending flows. … Lending to …
30th July 2012
