UK Commercial Property

Home working to cut office demand by up to 10%

An abrupt U-turn on workers returning to their offices last month signalled that the virus will continue to dominate lives in the UK into next year. In fact, we think office working may never quite be the same. As more remote working could reduce space requirements by up to 10%, this will have consequences for both the Central London rental outlook and prospects for development over the next decade.
Andrew Burrell Chief Property Economist
Continue reading

More from UK Commercial Property

UK Commercial Property Update

Can urban logistics fill the void in cities?

The acceleration of structural shifts is likely to result in some conversion of retail and to a lesser extent office space to urban logistics use. However, we think these conversions will be relatively limited given the significant shortfall in values between existing uses and industrial.

9 June 2021

UK Commercial Property Data Response

IHS Markit/CIPS Construction PMI (May)

Construction output rose further above pre-virus levels in May despite growing shortages of contractors and materials, and high cost inflation.

4 June 2021

UK Commercial Property Data Response

Lending to commercial property (Apr.)

We think a reduced willingness by lenders to allow for further payment holidays probably explains the sharp fall in net lending to property in April. Looking ahead, we expect subdued transaction volumes in 2021 and a weak appetite to lend will mean that net lending stays weak in the coming months.

2 June 2021

More from Andrew Burrell

UK Commercial Property Chart Book

Signs are positive but headwinds remain

Capital growth was solid in April at 0.5% m/m, although that reflected a slight reduction from the rate seen in March. Looking ahead, we expect the recovery in economic activity to continue which will support demand for commercial property. However, structural headwinds remain in the office and retail sectors, so any recovery is likely to be slow.

28 May 2021

Non-Euro European Commercial Property Chart Book

Scandinavia & Switzerland: Upside risk to industrials

Capital value growth improved in Scandinavia and Switzerland in Q1, helped by the easing of virus restrictions and by the improvement in economic activity towards the end of the quarter. The uptick in the pace of Scandinavian industrial capital value growth in particular poses upside risk to our end-year forecast. Looking ahead, the faster pace of vaccination and falls in new virus cases point to a further rebound in economic activity. This will support the property recovery, although the structural headwinds from more online spending and firms adjusting their office space will weigh on retail and office performance.

28 May 2021

Non-Euro European Commercial Property Chart Book

Emerging Europe: Re-opening won’t stop values falling

The fall in all-property rents, dragged down by office and retail sectors, meant that annual capital value growth remained in negative territory in Q1, despite the surprise fall in yields. Looking ahead, while the faster pace of the vaccination rollout and fall in new virus cases should pave the way for a swift rebound in economic activity, the recovery in property values is likely to prove much slower. Indeed, despite the improved occupier outlook, structural headwinds from more online shopping and remote working will continue to weigh on the office and retail sector. In turn, we expect prime rents in these sectors to extend their declines this year, outweighing any rental gain in the industrial sector. And we don’t expect the dip in yields in Q1 to be sustained, as higher retail yields will push up all-property yields. As a result, all-property capital values are set to drop again this year.

26 May 2021
↑ Back to top