UK Commercial Property

Property markets to take early rate hike in their stride

With UK policy rates now set to rise as early as next spring, this has tipped the risks to our commercial property outlook to the downside. But we don’t think the change is significant enough to make a wholesale downgrade to our view.
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

Industrial leads yield-driven recovery in values

The recovery in UK commercial property continued into August, despite a backdrop of more equivocal economic data. But, while the economic softness should be short-lived and returns for 2021 are likely to remain healthy, we suspect that the real estate recovery will struggle to maintain its current pace. The upturn so far largely reflects a yield-driven boost from the industrial sector, which we think will temper next year, while any revival in office and retail sectors remains hamstrung by structural concerns.

24 September 2021

UK Commercial Property Update

Limited risks to DM property from Evergrande

The Evergrande crisis has made waves in financial markets this week. But, while the developed property markets we cover may see some short-term upheaval, we think the impacts outside of China are unlikely to be severe or lasting. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our Commercial Property and Housing Services.

23 September 2021

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
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