UK Commercial Property
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IHS Markit/CIPS Construction PMI (Jul.)

July’s construction PMI figure was slightly disappointing compared with the previous month’s highs. But it continued to point to robust activity and we think any dip is most likely a reflection of material and labour shortages rather than any weakening in underlying demand. In view of the wider interest, we are also sending this UK Commercial Property Data Response to clients of our UK Housing Service.
Andrew Burrell Chief Property Economist
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UK Commercial Property Data Response

IPF Consensus Forecasts (Nov.)

The resilience of the commercial property market has led to further upgrades to the IPF Consensus view for this year, albeit still below our forecast. Beyond this year, we are more downbeat about the outlook than the consensus given our expectation that work-from-home will have a more lasting impact on offices.

26 November 2021

UK Commercial Property Update

Are flexible offices making a comeback?

Over the last two years, serviced offices have seen more upheaval than most other real estate sectors. But there have been some encouraging signs over recent quarters and long-term trends may have moved in their favour, though we don’t expect improved fortunes for flex space will be enough to change the outlook for offices as a whole.

25 November 2021

UK Commercial Property Outlook

Recovery to continue, but at a slower pace

The economic recovery has stalled and the near-term outlook is softer. Meanwhile, higher inflation is expected to bring interest rate hikes as early as December 2021, though we think that the pace of tightening will be fairly gradual. The post-COVID-19 property recovery has strengthened further across all sectors. But the rental outlook remains fragile, while we expect less assistance from falling yields after this year. As a result, we are close to the peak of capital value growth and performance will be much more subdued over 2022-25. Within this, industrial remains the standout, while London offices have the weakest returns.

19 November 2021

More from Andrew Burrell

UK Commercial Property Chart Book

Strong momentum not expected to last

The acceleration in all-property capital growth in June reflected a sharp fall in yields and strong rental growth. But, even as a fast economic rebound boosts occupier demand in the coming months, we think this rate of growth in values will not be sustained. Our expectations are that structural factors will hold back the recovery in the retail and office sectors, which will weigh on the all-property average this year.

23 July 2021

UK Commercial Property Update

Office markets to shrug off end of furlough

The government’s furlough scheme is regarded as one of the successes of the UK’s coronavirus policy response, but all good things must come to an end. Over the next few months, its unwinding will bring some risks, though we do not expect these to have a major impact on UK office markets.

2 July 2021

Non-Euro European Commercial Property Outlook

Emerging Europe: Industrial still a bright spot

With virus restrictions set to be eased further, we expect the recovery in economic activity to gather pace from Q3, which should give occupier markets a lift. But the pick-up will not be enough to prevent falls in office and retail rents this year. And further out, large supply pipelines and structural change will keep rental values in check. Meanwhile, with monetary policy set to normalise earlier than we had initially anticipated, we have now pencilled in sharper property yield rises across all sectors from 2023. As a result, we expect capital values to barely grow over the next five years. In turn, total returns will be dominated by income returns, with industrial outperforming offices and retail, echoing our sectoral rankings for western Europe.

25 June 2021
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