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Lending to commercial property (June)

As the economic recovery gathers pace, lenders have been less willing to grant further payment holidays to landlords and a rise in repayments probably explains the sharp decline in net lending in June. Looking ahead, we think a slow recovery in transaction activity and tight credit conditions will weigh on lending to commercial property this year.
Prohad Khan Property Economist
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UK Commercial Property Valuation Monitor

Valuations worsen further, but may be bottoming out

Commercial property valuations worsened for the sixth quarter in a row in Q2, and for all-property is now the most overvalued since late 2007. But since the end of June gilt yields have edged back and we doubt they will match their previous peak over the next couple of years. With property yields also set to rise we therefore doubt that valuations will continue to deteriorate.

11 August 2022

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S&P Global/CIPS Construction PMI (Jul.)

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4 August 2022

More from Prohad Khan

UK Commercial Property Update

Supermarkets highly priced but for good reason

The supermarket yield spread to “all-retail” has grown to almost the level it reached in 2009. However, we think there are good reasons for this. Admittedly there are risks ahead for the sector that could dent future prospects, but for now, supermarkets tick a lot of boxes for investors in a tough retail environment.

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Credit Conditions Survey (Q2 2021)

A further easing of concerns about the outlook for property prices and the economy suggests that mortgage lending conditions will continue to improve. That will help ensure that house prices are resilient to the end of the stamp duty holiday.

15 July 2021

UK Commercial Property Update

South East office rents still have further to fall

Although we expect the economic outlook will continue to improve, we think that South East office rents will still edge lower this year. What’s more, we don’t expect much of a rebound in 2022, as a shift to remote working will continue to weigh on demand.

7 July 2021
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