UK Commercial Property
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Will COVID-19 shift real estate out of town?

With workers spending more time away from city centres, some expected that out-of-town offices could swing back into fashion. It is still early, but from the UK data, the evidence suggests that it is suburban retail, not offices, that is benefiting most from the home-working revolution.
Andrew Burrell Chief Property Economist
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UK Commercial Property Chart Book

Rental growth hits a three-year high

Commercial property’s recent good run continued in October. The annual rate of rental growth surged ahead after only breaching positive territory for the first time in almost two years during August. However, given the economy’s headwinds over the near term, we suspect that property markets will struggle to maintain their current pace. Once this year’s rebound passes, we expect total returns to soften over the forecast period, as yields stabilise and structural changes within retail and offices weigh on rental growth.

3 December 2021

UK Commercial Property Data Response

Lending to commercial property (Oct.)

A drop in repayments and rise in development activity resulted in positive net lending in October for the first time since March. Despite this turnaround, credit conditions will remain tight and uncertainty about the recovery will continue to weigh on lending in the near term.

29 November 2021

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

More from Andrew Burrell

UK Commercial Property Update

What do the latest UK jobs data tell us?

UK employment has recovered strongly in recent quarters and is set to see further growth into 2022. This will be good news for UK offices, especially in regional cities. But with occupiers set to look beyond headcount when making their space decisions, we don’t think it will bring a turnaround in the sector.

7 October 2021

UK Commercial Property Update

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.

30 September 2021

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
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