Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
The tight supply of available space in Central London office markets is likely to boost rental values this year. But there has recently been a pretty steady flow of less encouraging demand data. Accordingly, there has been nothing to change our cautious …
5th April 2011
In February, the CIPS/Markit construction PMI hit its highest level since last June, driven primarily by a surge in residential construction activity. However, activity in the commercial property sector slowed a little, consistent with the uncertain …
4th April 2011
Today’s Credit Conditions Survey suggested that there is unlikely to be a surge in lending flows in either the residential or commercial property market any time soon. Residential credit availability may loosen slightly but demand for it remains weak. …
1st April 2011
Net new lending to standing commercial property in February was positive. However, given that banks’ exposure to property remains high, we doubt that lending flows are about to surge. But today’s data were consistent with better anecdotal evidence and may …
29th March 2011
UK institutional investors made a smaller net purchase of property in Q4 2010 than in Q3, though inflows were still solid by historical standards. With anecdotal evidence suggesting that investors’ interest in UK property remains high, net inflows to the …
25th March 2011
Central London offices were once again the only markets to see higher rental values in February. West End office rental values, for example, were up by more than 1%m/m but, by contrast, shopping centres saw a decline of 0.4%. We expect divergent rental …
24th March 2011
The Budget was a fairly cautious affair, with the Chancellor introducing a fiscally neutral package of measures and hence sticking closely to the existing austerity plans. Nonetheless, the Government’s fiscal consolidation plans continue to rest on a …
23rd March 2011
Given the degree of overvaluation in the residential market and the fragile economic backdrop, we are not convinced of the merits, or the likely success, of the Budget’s attempt to stimulate first-time buyer demand. But, given time, we are optimistic that …
The latest Colliers/Real Estate Capital survey showed that commercial property prices are still expected to fall this year, but only modestly, before mild, rent-driven increases are seen in 2012. The survey also confirmed that, despite the difficult …
Financial & business services (FBS) sector jobs edged up in Q4, though year-on-year growth is yet to recover to levels consistent with strong and sustained gains in City office rental values. We therefore expect the recovery in Central London office …
16th March 2011
Our central view is that IPD all-property capital values will decline by a modest 2% this year. But with the public sector spending cuts yet to start in earnest, there are plenty of downside risks to that forecast. However, recent evidence that there is …
14th March 2011
The outlook for hotel property total returns over 2011/12 is widely considered to be better in London than in the regions. It is hard to argue with that assessment. However, there are reasons to be cautious about the longer term prospects for London …
10th March 2011
There is not an automatic link between real estate equity prices and price changes in the physical property market. However, while the prospect of a faltering economic recovery this year still suggests to us that IPD all-property capital values will edge …
8th March 2011
UK markets appear to have become less optimistic over the outlook for the economy against a background of an uncertain global environment, surging oil prices, high and rising inflation and the threat of monetary tightening. UK equities have …
4th March 2011
2nd March 2011
Net new lending to commercial property was negative for the tenth month in a row in January and the sector’s share of outstanding bank debt continued to edge lower. We expect this process to remain gradual, with lenders unlikely to force an uncontrolled …
1st March 2011
All-property rental values remained broadly stable in January, though again this owed much to rises in the City and West End office markets, which offset falls elsewhere. All-property initial yields were also unchanged in January, leaving capital values …
28th February 2011
On average, respondents to the IPF Consensus still expect all-property capital values to edge lower this year, though the scale of the potential fall has been trimmed. Even so, some forecasters think that capital values could drop by almost 9% in 2011 and …
25th February 2011
One interpretation of recent Propertydata.com figures, which show rising average transaction-based commercial property yields, is that consensus forecasts for capital values to fall by 2% or so this year are too sanguine. Alternatively, however, the data …
22nd February 2011
Driven by the non-prime segment, our forecast is that IPD all-property capital values will edge down by about 2% this year. But they will start to rise again in 2012 as rental values gradually increase. Over 2011-15, total returns should average about …
16th February 2011
The latest RICS data contained few surprises. Most importantly, they tend to indicate that the downturn in average rental values is now at an end. However, they also square with our view that any rise in average rents this year will be driven solely by …
15th February 2011
There are grounds to think that the consensus forecasts that IPD all-property rental values will rise by about 1% in 2011 and 2.5% in 2012 are too cautious. First, the recovery in rental values in the mid- 1990s was much stronger than that. Second, over …
11th February 2011
It seems almost certain that over the coming quarters lenders will become less willing to extend maturing loans and will also increase the pressure on borrowers to sell property and repay non-performing loans. But rather than forcing a wave of fire-sales, …
7th February 2011
December’s snow may have distorted the data, but the latest RICS survey nevertheless showed that commercial property, driven by London’s office market, was the only sector to see a rise in construction activity in the final stages of last year. But even …
3rd February 2011
In January, the CIPS/Markit construction PMI rose back above the expansion/contraction mark of 50. Of course, after December’s snow, a rebound was perhaps always likely. While activity remains healthiest in the commercial property segment, we see little …
2nd February 2011
1st February 2011
Survey evidence suggests that German commercial property, retail in particular, is now at the top of cross-border investors’ target lists, while the UK has slid down the rankings. This shift in preferences may well be justified for risk management …
27th January 2011
All-property rental values were flat in December, though this disguised the fact that rises in City and West End offices and the retail warehouse segment were offset by falls elsewhere. Meanwhile, net property lending flows remain negative and there is …
25th January 2011
Various near-term indicators currently point to a strong recovery in industrial property rental values in 2011. This may well be the experience for some landlords. On average, however, with the overhang of available space still large and GDP growth likely …
20th January 2011
Retail vacancy rates edged down in H2 2010, but with consumer spending likely to decline this year and more empty retail properties proving harder to re-let than ever before, we do not think that this will prevent retail rental values from sliding lower …
19th January 2011
The scope for active asset management to boost shopping centre returns will explain most of the recent rise in investor interest in the segment. Although its importance can be overstated in a year when weak consumer spending will be a significant …
13th January 2011
The latest data from the CBI and PwC suggest that financial services sector output rose in the final three months of 2010 but that employment fell sharply. What’s more, the fact that headcounts are expected to fall again in the near-term is surely a …
10th January 2011
Today’s Credit Conditions Survey showed that in both the housing and commercial property markets lenders have continued slowly to improve the volume of credit that is available, if not its terms. However, demand for finance appears to be faltering, …
6th January 2011
Construction activity in the civil engineering and housing sectors fell in December while commercial property saw the slowest pace of growth in 10 months. That moderation in the rate of development activity seems consistent with other evidence that the …
5th January 2011
The economy is holding up well for now, with retail sales volumes, for example, rising in November. However, the labour market is beginning to creak, with employment on the Labour Force Survey falling in the three months to October. Inflation remains …
22nd December 2010
The dip in net purchases of property by UK institutional investors in Q3 may signal the start of a renewed soft patch for property investment. But if we are right that the recent rise in bond yields will be unwound, investor interest in property is likely …
21st December 2010
The latest Colliers/Real Estate Capital survey confirmed that this year’s gains in commercial property capital values are expected to give way to modest falls of perhaps 2% to 3% in 2011. Positive rates of capital value growth are then expected to return …
20th December 2010
Recent Bank of England and De Montfort University reports suggest that deleveraging in the UK commercial property sector is likely to continue in a slow but reasonably orderly fashion. However, one central message of both reports seems to be that building …
17th December 2010
The number of jobs in the financial & business services (FBS) sector rose again in Q2, taking the increase since the start of the year to 1.7%, or 104,000 jobs. We remain cautiously optimistic about the outlook for office rental values, though this will …
15th December 2010
IPD vacancy rate data support the widely-held view that non-prime property has suffered more than prime from a rise in empty floorspace over the past two years. The figures also suggest that the standard shop segment has been the worst-hit by rising …
9th December 2010
Mergers and acquisitions (M&A) activity involving UK firms strengthened in Q3, a development that is likely to have supported office rents in Central London. Even so, with economic growth likely to be well below trend in 2011 there seems every chance that …
7th December 2010
Commercial property remained the most active part of the construction sector in November, helping to deliver a modest rise in construction output. But whether this apparent optimism about the occupier market outlook can be sustained through 2011 will …
2nd December 2010
We suspect that the next material move in the property to bond yield spread is more likely to be down than up. That move may still be some way off, however, perhaps not even until 2013. But, when it does arrive, and after allowing for the likelihood that …
30th November 2010
Net new lending to commercial property was negative again in October. Low gross lending and borrowers’ focus on repaying existing debt are both likely to have contributed to that weak net figure. There also seems to be every chance that net lending flows …
29th November 2010
Respondents to the Q4 IPF Consensus expect that a 6% gain in all-property capital values this year will give way to a modest fall of 2% next year, driven by higher yields. We also expect prices to drop in 2011. However, some forecasters still expect price …
26th November 2010
On the whole, financial markets have become increasingly optimistic about the prospects for the UK’s recovery. Interest rate expectations have begun to rise again and equities have rebounded, while inflation expectations in the bond market are now …
24th November 2010
All-property rental values were basically unchanged again in October, with modest rises in Central London office markets balanced by falls elsewhere. A meaningful recovery in rental values, however, remains some way off, given that we expect GDP growth to …
The latest RICS Construction Survey had a distinctly negative tone, with activity in all sub-sectors falling in Q3. Given construction’s key role in the wider recovery to date, the survey thus underscores our sub-consensus growth forecasts for 2011 and …
19th November 2010
Our forecast is that annual IPD all-property total returns will average about 9% over 2011-14. The big picture is that low and broadly stable bond yields will support property prices over the forecast period, as will an occupier market recovery, albeit …
16th November 2010
Transactions activity has cooled recently, with anecdotal evidence suggesting a buyer/seller stand-off in the secondary segment has been a contributing factor. On IPD data, this segment is fairly small, so resolving any buyer/seller mismatch through lower …
11th November 2010
