Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Indicators suggest that growth has increased from 0.2% q/q in Q1 to perhaps 0.4% q/q or 0.5% q/q in Q2. The labour market continues to post solid jobs gains, suggesting firms are confident about the economic outlook. Further, positive real wage growth is …
25th July 2018
Following weakness in Q1, today’s RICS Survey pointed to a further, modest deterioration in occupier demand conditions. However, the headline numbers paint an overly soft picture, with the deterioration primarily being driven by issues in the retail …
19th July 2018
There was another strong increase in job creation in May. And the fact that firms are struggling to fill vacancies suggests little change in the current health of occupier markets. … Employment …
17th July 2018
Investment activity picked up in June, consistent with indications that growth in Q2 has recovered from the soft start to the year. Nevertheless, on an annual basis investment continued to soften. … Commercial property investment …
13th July 2018
Credit availability for residential mortgages edged up in Q2, but only for lower LTV mortgages. And while the credit conditions for commercial property were broadly unchanged, for the first time since 2015, lenders expect credit availability to rise next …
12th July 2018
The evidence suggests that the upswing in industrial rental values has started to fade. As investors cotton on and reassess the outlook for income growth, the current, rapid rate of yield compression is also likely to fade, sharply slowing the pace of …
5th July 2018
Today’s CIPS/Markit Construction PMI suggests that the recovery in construction activity continued in June. Further, improvements in the future business conditions and new orders indices suggest that firms are slightly more optimistic. Even so, the …
3rd July 2018
A strong monthly increase in lending for standing property drove net lending to property in May. But a dip in net lending for development may be a sign that lenders’ risk appetite is still weak. … Lending to commercial property …
29th June 2018
Data and surveys suggest there has been some recovery in economic activity in the UK during the second quarter. Developments in the consumer sector have been positive, with annual growth in retail sales reaching a 13-month high and the pace of job …
26th June 2018
The evidence suggests that the headwinds currently buffeting the retail sector are taking a larger toll on shopping centres than on other types of retail property. As a result, and in contrast to the other retail segments, shopping centre capital values …
21st June 2018
The latest labour market data paint a worrying picture for occupier demand and rental value growth in the South East office market. Yet other indicators are more positive, and if we are right to expect the economy to strengthen as the year goes on, office …
19th June 2018
The surge in flexible office take-up over the past five years has raised the question as to whether office vacancy rates could be distorted as flexible offices tend to not be fully occupied. However, their small share of total office stock and the fact …
13th June 2018
The annual pace of job creation increased further in April. However, a slowing in average earnings growth and an increase in the number of part-time workers suggest the headline numbers may not be as positive for occupier demand as they appear at first …
12th June 2018
Investment activity in May failed to show any signs of a revival. Although overseas investment declined, this was comfortably offset by a renewed interest from institutional and occupier investors. … Commercial property investment …
11th June 2018
In contrast to the problems on the high street, leisure sector fundamentals look strong. The outlook for leisure rental value growth is positive, supported by rising real incomes and solid underlying occupier demand. Furthermore, despite competition in …
6th June 2018
Following a strengthening in activity in April, todays’ CIPS/Markit Construction PMI suggests the recovery in commercial construction activity has been sustained. But falls in the future business expectations and employment indices suggest there still …
4th June 2018
Current forecasts for commercial property prices to plateau rather than peak would represent a significant break from the boom/bust cycles of the past. Yet while some parts of the market look vulnerable to a negative shock, it is hard to make a case that …
1st June 2018
Over the past three months, lending to commercial property has stalled. But the weakness has not reflected a decline in lending to new development, suggesting there is still some appetite to take on risk. … Lending to commercial property …
31st May 2018
Our forecast for rental value growth in 2018 is similar to that of the IPF consensus, but there is a greater degree of variation in forecasts for capital value growth. However, over coming years there is a consistent expectation that there will be a soft …
25th May 2018
Recent weakness in growth is expected to be short-lived, but given the slowing already seen, we have trimmed our annual growth forecast for 2018 from 1.8% y/y to 1.6% y/y. However, occupier demand fundamentals look positive. The labour market continues to …
24th May 2018
The bout of softer-than-expected inflation and activity data which caused the MPC to step back from hiking Bank Rate in May is certainly reason for caution. But like the MPC, we think that temporary factors were behind the slowdown, and suspect that …
17th May 2018
Following the string of weaker outturns so far over 2018, investment activity softened further in April. However, if we are right that GDP growth will recover over the remainder of the year, investment activity is likely to hold up from here. … Commercial …
16th May 2018
Robust job creation, a high level of vacancies and another small uptick in the pace of average earnings growth paint a positive picture for occupier demand. But with London punching above its weight and rental values in the capital already high, the …
15th May 2018
Given the prevailing level of risk-free rates, it is hard to make a compelling case that commercial property is overvalued as an asset class. Admittedly, valuations in some segments, such as offices in London and the South East, look rather more stretched …
11th May 2018
We do not think recent softer economic data or the MPC’s decision to hold fire today have set the tone for 2018. Our above-consensus growth forecast is consistent with the MPC continuing to increase interest rates this year which, in turn, will begin to …
10th May 2018
Compared to other office markets, the Rest of the South East has been performing well. However, we do not expect this outperformance to last. A fresh surge in occupier demand seems unlikely and, as such, a slowdown in rental value growth in the Rest of …
3rd May 2018
Following the Q1 weather disruptions, the CIPS/Markit Construction PMI suggests that there was a recovery in construction activity in April across all sub-sectors. Yet, the improvement was more positive in the civil engineering and residential …
2nd May 2018
Today’s net lending data from the Bank of England offered few surprises. But the fact that lending activity appears subdued seems consistent with the falling levels of investment market activity in recent months, as well as reports that development …
1st May 2018
Today’s RICS Survey paints a subdued picture of occupier demand conditions. But closer inspection shows that this weakness stems mainly from the continuing problem of the retail sector. … RICS Commercial Property Market Survey …
26th April 2018
Investment activity slowed over the first quarter of 2018, with both the number and value of transactions falling since the end of 2017. Nevertheless, a small increase in rents and slight fall in yields meant the pace of capital growth picked-up a bit in …
24th April 2018
Healthy levels of occupier demand and rising rental values, at least in the office and industrial sectors, have not been able to boost the development pipeline, with labour shortages continuing to constrain activity. … RICS Construction Market Survey …
19th April 2018
All-property rental value growth has been hovering at just under 2% y/y for the past seven months and shows few signs of slowing. But a sectoral breakdown shows that this stability is largely dependent on the strengthening industrial and Rest of the UK …
18th April 2018
London continues to punch above its weight in terms of job creation. Despite that, rents in the key City and West End office markets are stagnating at already high levels. Accordingly, the headline jobs numbers, which imply no moderation in all-property …
17th April 2018
The Bank of England’s survey of lenders suggests that the recent weakness in mortgage lending has been driven by falling demand for credit. But the survey also points to a sharp fall in loan approval rates, as well as tightening credit standards. … Bank …
12th April 2018
Investment activity in UK commercial property fell in March, for the fourth consecutive month. The broader picture is that the value and number of deals has dropped in the first quarter, as investors appear to have been unwilling to sustain current market …
11th April 2018
According to MSCI, office yields in the Rest of UK office markets have fallen far more sharply over the past year than in the Rest of South East. That has returned the yield spread between the two markets to past norms. While that should mean that …
5th April 2018
Extremely cold weather in March saw the CIPS/Markit Construction PMI plunge to its lowest level since July 2016. But with employment and future business expectations rising, there are good reasons to think that construction activity will strengthen in the …
4th April 2018
Lending to the property sector showed no sign of improvement in February. But with net lending for development positive and lending to standing investment negative, the data suggest that a lack of opportunities, rather than a lack of appetite, may be a …
29th March 2018
A recent survey found that 72% of lenders intended to increase origination volumes for UK commercial property this year. That offers a sharp contrast to recent market conditions. Nevertheless, we doubt that 2018 will turn out to be the year in which …
23rd March 2018
Today’s jobs data highlight that tentative signs of a moderation in property investment market activity are not being reflected in, or driven by, occupier fundamentals. If anything, labour shortages look more likely to act as a drag on occupier demand and …
21st March 2018
Expressed as a share of total commercial property investment, deals involving alternative assets accounted for almost £1 in every £6 invested last year, a record high. Yet leaving student housing or other types of residential property aside, there is …
15th March 2018
Investment activity in the UK commercial property market softened sharply in February. Yet, the total was not unusually weak for the time of year and, given the lumpy nature of property investment, it should not be interpreted as a sign of a turning point …
14th March 2018
Development activity is now much more muted than in the run up to the EU referendum suggesting that, while rents and capital values have recovered from the result, developers are still choosing to err on the side of caution. There is nothing in the data …
8th March 2018
Bad news for the retail sector made almost as many headlines as the snow last week. The easiest conclusion would be to blame online competition. However, there are reasons to think that firm-level problems also played a part. … Retailer closures highlight …
6th March 2018
February’s rise in the CIPS/Markit Construction PMI was an encouraging sign as it stemmed from an improvement in both commercial and residential construction activity. Yet, there was no evidence to suggest that a period of renewed strength for the …
2nd March 2018
Net lending to commercial property fell in January. But the underlying picture was a little more positive than the headline suggests. Not only was January’s fall small in comparison to the upward revision to December’s figures, but net lending to projects …
1st March 2018
All things considered, January was a fairly mixed month for the economic and property market data. That said, the recent falls in risk-free rates and the exchange rate should both give some support investment activity during the months ahead. … A patchy …
28th February 2018
Financial markets are now pricing in a 60% probability of the Monetary Policy Committee (MPC) raising Bank Rate by a further 25bps in May, up from around 40% at the start of the year. But we still think investors are underestimating the pace of tightening …
26th February 2018
The IPF consensus has pushed up its forecast for all-property total returns this year, reflecting a less pessimistic outlook for rental growth. But in 2019 and 2020 a gradual upward drift in yields is still expected to drag down capital values modestly. …
23rd February 2018
Job creation failed to meet economist’s expectations in December. Combined with a rise in the participation rate, that contributed to the first increase in the unemployment rate since August 2016. Yet, there were no signs in the data of impending stress …
21st February 2018
