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There is still likely to be a reckoning for offices

We think the recent upturn in office market performance is largely down to the one-off release of pent-up demand and remain downbeat about future prospects. With occupancy still languishing and remote working firmly established, we think that the risks to office vacancy and rents have not passed yet. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of all our Commercial Property Services.
Andrew Burrell Chief Property Economist
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More from UK Commercial Property

UK Commercial Property Update

Student accommodation rent growth to stay solid

Student enrolment remained robust during the last couple of years and is likely to continue growing strongly over the next decade. But supply of purpose-built beds has grown less rapidly and the pipeline points to a continued lag against demand. This demand-supply imbalance will likely support solid rent growth over the coming years.

24 June 2022

UK Commercial Property Chart Book

Signs of a slowdown emerging

Annual all-property rental growth reached a five-year high in May, while returns rose to levels last seen in mid-1994. But signs of a slowdown also emerged, especially in the red-hot industrial sector, where capital value growth and total returns eased for the first time in almost two years. In addition, the recovery in retail and offices lost some steam, with monthly rental growth rates nudging lower. We expect the pace of growth will let up soon as yields start to stabilise and structural changes weigh on occupier demand. As such, we expect returns to cool to below 10% by end-2022.

22 June 2022

UK Commercial Property Update

Will Manchester office rental growth outperform again?

After a more severe downturn in 2020, Manchester office rental growth has caught up with other regional cities in recent quarters. While employment growth and occupier activity may remain fairly weak, tight new supply dynamics should see Manchester office rents rising broadly in line with the average of other regional offices over the short term.

17 June 2022

More from Andrew Burrell

US Housing Market Data Response

Existing Home Sales (Feb.)

Existing home sales slipped in February, more than reversing January’s surprise increase. And the Fed’s first move on interest rates this week reinforces our expectation that existing sales will remain soft in the months ahead. Long Run Outlook Drop-In (23 March, 11:00 EDT/15:00 GMT): What will be the lasting impacts of the war in Ukraine? What legacies will the pandemic leave? What does a future of higher inflation mean for economies and markets? Neil Shearing hosts this special discussion with senior economists about the long-term investing outlook on Wednesday. Register here.  

18 March 2022

UK Commercial Property Update

Ukraine raises risk of sharper slowdown

At the start of the Ukraine crisis, we felt the direct property impact would be modest, based on limited Russian ownership and capital flows. But as the conflict extends into a third week, concerns have risen about the macroeconomic impacts of the invasion and the potential spill-overs for commercial property.

11 March 2022

UK Housing Market Data Response

RICS Residential Market Survey (Feb.)

The February RICS residential survey continued to point to resilience in UK housing markets. New enquiries remained strong and, while there is some evidence that supply constraints may be easing at last, the number of homes for sale remains very low.

10 March 2022
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