UK Commercial Property
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Is COVID-19 the death-knell for physical retail?

Retail has been hit hard by the COVID-19 crisis and lasting changes to online spending will bring further pain. While our estimates suggest that the impact is likely to be less severe than structural change in offices, the rental outlook is expected to remain weak and a faster online transition will reinforce this. In the longer term, we expect the sector will continue to underperform, though how much will vary between markets and will be driven by both online migration and other market conditions. Overall, the UK is most exposed, along with a few European markets, while the US may also be vulnerable later in the decade.
Andrew Burrell Chief Property Economist
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UK Commercial Property Update

Will the rental backlog derail the retail recovery?

One feature of the COVID-19 era has been persistent non-payment of rents, particularly in the retail and leisure sectors. But we don’t think this will come to a head next year once the eviction ban lifts, as by then the economy should be in better shape and landlords will have little interest in forcing the issue.

17 September 2021

UK Commercial Property Update

Are we underestimating the global property upturn?

The most recent commercial property data have been surprisingly upbeat and have raised the possibility that the recovery could be stronger than expected. But we think investors may have run ahead of themselves and this trend is unlikely to be sustained given the weak rental outlook. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our US Commercial Property service & European Commercial Property Service

16 September 2021

UK Commercial Property Update

What will happen to submarket rents after COVID-19?

With more hybrid working post-pandemic, the view is that office rents will be under pressure for many years. This raises questions about which locations could be more resilient and if rents in central business districts (CBDs) will perform better than elsewhere.

In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our European Commercial Property service.

8 September 2021

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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

UK Commercial Property Update

Remote working one year on

A year ago, we were just digesting the impact of remote working, but already permanent change looked likely. And while we know more now and continue to refine our views, we see little reason to change our conclusions from last summer that office demand will suffer a major hit from this shift.

23 June 2021
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