UK Commercial Property
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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.
Pieter Du Preez Property Economist
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UK Commercial Property Chart Book

Annual property returns hit a seven-year high

Commercial property ended last year strongly. Annual rental growth climbed to a five-year high, while annual total returns crossed the 20% level. This was largely the result of dynamism in industrial, though all sectors saw positive annual returns, even retail. But we think it will be a struggle to repeat this stellar performance in 2022, as economic headwinds and structural changes weigh on rental growth and the scope for further yield reductions reduces. As a result, we expect returns to be significantly lower in 2022.

21 January 2022

UK Commercial Property Update

Industrial yield falls set to slow

The industrial sector had its best year in over three decades in 2021 as demand soared and supply struggled to keep up. Although we expect the sector to perform well again this year, we don’t think that yields can continue to fall at the rate seen in 2021.

20 January 2022

UK Commercial Property Update

Which assets can provide the best inflation protection?

Recent data have reinforced concerns about inflation risks in the UK. We remain of the view that property investments provide only limited long-term protection against higher prices, but of the individual asset types, we think industrial and residential are best placed to weather any surge. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our UK Housing Service.

14 January 2022

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UK Commercial Property Valuation Monitor

Valuations deteriorate as spreads narrow

Compared to bonds and equities, property valuations deteriorated further in Q3. This was due to a combination of a fall in property yields on the one side and a rise in both bond and equity yields on the other. Although we expect a less dramatic fall in Q4, the risks to yields lie firmly on the downside.

12 November 2021
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