Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
One “big call” that has been part of our forecasts for some time now is that South East offices will be amongst the best performing segments over the next year or two. To be fair, rents and capital values are unlikely to surge in absolute terms. But …
10th July 2013
To us, the recent surge in hotel deals is not indicative of any sharp, sector-specific improvement in the underlying demand drivers. Instead, investors simply seem to have been making opportunistic purchases of distressed portfolios. In our view, hotel …
8th July 2013
The Bank of England’s latest Credit Conditions survey shows that the supply of finance continues to improve in both the residential and commercial property sectors. However, there has been no easing in residential credit scoring criteria, while commercial …
3rd July 2013
The construction PMI indicates that, after four months of falls, commercial property activity was broadly stable in June. This hardly suggests that developers anticipate a surge in occupier demand or rents anytime soon. But at least the data do not …
2nd July 2013
Net new lending to commercial property was negative again in May. Existing lenders are likely to continue to cut the size of their property loan books in the coming months, although there are few signs that new, non-bank lenders are about to halt their …
1st July 2013
The recent bond market sell-off is unlikely to trigger a commercial property triple-dip. But it may take the heat out of London and other prime segments, while also acting as a catalyst for increased investor interest in regional or secondary markets. …
27th June 2013
Initial yields were broadly stable again in May, but once you take the figures down to two decimal places, all-property capital values rose. The gain of 0.01%m/m was obviously miniscule, but it was nevertheless the first increase since October 2011. We …
25th June 2013
UK-based investing institutions continued to expand their commercial property portfolios in Q1. Historically, this has been associated with rising capital values and we remain confident that modest gains will indeed be seen in H2 this year. … …
21st June 2013
The IPD data for May appear to show that commercial property values have turned the corner. With both economic sentiment and the hard economic activity data now delivering more positive than negative surprises, the risk that this turns out to be a false …
18th June 2013
The latest FBS jobs data support our view that Manchester will be amongst the best performing Big Six (non-London) office markets this year, as it was in 2012. But given high vacancy rates and soft demand prospects, Birmingham and Glasgow will be further …
13th June 2013
The continued, steady increase in the number of financial & business services sector jobs in the first three months of the year should provide a further boost to London office rents for at least the next few quarters. … Financial and business services …
12th June 2013
The divergence between out-of-town and in-town shopping centre capital values is not over yet. We suspect that, over the next three years, stronger growth in rental values will deliver further gains in out-of-town capital values while the value of in-town …
6th June 2013
The CIPS/Markit construction PMI and the latest mergers & acquisitions data suggest that occupier market conditions remain testing. Accordingly, there seems little prospect of a rental value recovery this year. … Construction PMI (May) and Mergers & …
4th June 2013
Respondents to the latest IPF Consensus forecasts envisage rents and capital values holding broadly steady this year, also indicating that they think that yields have peaked. In contrast to the consensus, however, we think that yields could start to edge …
31st May 2013
Net new lending to commercial property remained negative in April and all the signs are that the deleveraging process has further to run. This may not prevent an upturn in capital values later this year, but it will limit its strength. … Lending to …
The recent surge in the FTSE 100 to just shy of its all-time high has fuelled speculation that a ‘great rotation’ of funds from bonds to equities is under way. But we struggle to see how the equity market rally will be sustained. Granted, the equity risk …
30th May 2013
The investment market was very quiet in April, with only the office sector seeing a meaningful level of activity. In turn, most of those deals were in Central London, and involved overseas buyers, especially from the Far East and Middle East. …
23rd May 2013
Over the past week or so the signs that commercial property investor confidence has picked up have continued to emerge. Any upturn in capital values is unlikely to be large or sustained until a widespread rental recovery begins, which does not look likely …
20th May 2013
The latest RICS survey suggests that occupier demand is rising gently and that rents may be about to turn a corner, albeit with the retail sector continuing to lag. These data bolster our expectation that a mild recovery in all-property capital values …
14th May 2013
The main messages of our commercial property forecasts have not changed materially since the previous Analyst . At the all-property level, capital values are more or less at a floor and there is a good chance that growth will resume later this year or in …
13th May 2013
We sense that property investors are poised for an upturn but not yet confident enough to become fully active again. One thing we will be watching for as a sign that a turning point has been reached or passed is a fall in the average value of deals, …
10th May 2013
It is clearly good that the economy has avoided another recession. But the news will do little to accelerate the much-needed recovery in commercial property rental values outside London. On past form, to do that, the pace of GDP growth needs to rise much …
8th May 2013
The latest CIPS/Markit construction PMI suggests that commercial property activity has now not risen for nine months in a row. This provides yet another signal that the wider occupier market will remain sluggish throughout 2013. … CIPS/Markit …
2nd May 2013
Net lending to commercial property was negative again in March and we think that this trend will remain in place for a while yet. But the deleveraging should remain “benign”, with new lending being held low and repayments doing most of the work. … …
30th April 2013
IPD all-property rental values were flat in March, while initial yields remained steady at around 6.3%. We had expected the mild upswing in yields and downswing in capital values to come to an end in late 2012 or early 2013 and this seems to have been …
26th April 2013
The tone of the latest RICS construction survey was broadly positive. Although developers’ confidence in the prospects for property demand could not be classed as bullish, at least there are signs that rents are close to a floor. … RICS Construction …
25th April 2013
London City and West End office rents are now some 15% to 20% above their 2009 floors and the Consensus envisages that they will record similar gains in the next five years. We are more cautious. While the comparative strength of London’s labour market …
18th April 2013
The number of financial & business services (FBS) sector jobs rose to a new record high in the final three months of last year. Although the large development pipeline will act as a brake, it now looks pretty clear that Central London office rents will …
17th April 2013
Central London aside, weak economic growth and fragile business confidence are acting as a drag on occupier demand, pushing back a recovery in commercial property markets. South East offices will not be wholly immune to such factors, but with solid …
12th April 2013
The gap between industrial property yields in the South East and the Rest of the UK has risen to a level that is 50% higher than its long-run average. This could be a sign that yields in the South East are too low relative to yields in the Rest of the UK. …
9th April 2013
Credit availability to the property sector, particularly residential mortgage credit, is still rising, helped by some lenders seeking to increase their market share. But the improvement is not as marked as in recent quarters, and concerns about high house …
3rd April 2013
The tone of today’s CIPS/Markit construction PMI was downbeat. Whether we look specifically at the commercial sub-sector or the construction sector as a whole, activity has now contracted in seven of the past eight months. … CIPS/Markit Construction PMI …
In net terms, lending to the commercial property sector was negative for the fifteenth consecutive month in February. Yet progress in reducing lenders’ exposure to the property sector is slow. Thus, for the foreseeable future, a continuation of recent …
2nd April 2013
All-property rental values ticked down by 0.1%m/m in February. That was a small drop, but nevertheless the first since October last year. At the sub-sector level, perhaps the biggest break from recent performance came in the retail warehouse segment, with …
27th March 2013
March’s Colliers/Real Estate Capital survey indicates that secondary property yields edged back up in recent months, reversing the previous quarter’s fall. If anything, this has increased the short-term downside risks to all-property capital values. But a …
25th March 2013
UK-based investing institutions made modest net purchases of commercial property in the final few months of 2012, extending the pattern of the past few years. But this has not triggered a wider investment market recovery so far and there seems little …
22nd March 2013
Today’s better-than-expected retail sales data will do little to halt the polarisation in values evident in the IPD retail sub-markets. Even if this is the start of a modest spending upturn, until the problem of excess capacity on high streets is tackled, …
21st March 2013
If growing fears of a sustained rise in inflation proved well founded, this will present another obstacle to a meaningful recovery in commercial property values. But a repeat of the 1970s experience, when weak growth and high inflation pushed real values …
14th March 2013
The current IPF Consensus forecasts envisage that capital values will do little more than mark time for an unprecedented seven years. Yet this is not a sign that the property market cycle has been confined to history, rather it is indicative of how low …
12th March 2013
The construction sector has endured a terrible recession, with double-digit declines in output and employment. In theory, there is scope for a sharp comeback. But given the squeeze on credit and public sector building and the possibility of a shift in …
7th March 2013
We are wary of claims that changes in the nation’s shopping habits will drive a large, positive step-shift in the relative performance of distribution warehouses. Nevertheless, the combination of relatively favourable demand fundamentals and tight supply …
6th March 2013
Merger and acquisition (M&A) activity slumped at the end of 2012. This obviously hasn’t pulled the rug out from under the Central London office markets, but will nevertheless have been a restraint. With the economic outlook still subdued, in our view, so …
5th March 2013
The stabilisation in commercial property construction in January proved to be only temporary, with the CIPS/Markit PMI falling back to 45.5 in February, a three-year low. Given occupier demand is still fragile and development finance hard to get, …
4th March 2013
Net commercial property lending by banks and building societies was negative again in January and we doubt that this trend will come to an end anytime soon. However, at least “new” lenders, e.g. insurance firms, are becoming more active. … Lending to …
1st March 2013
Concerns about the MPC’s commitment to its inflation target, weakening expectations for UK GDP growth relative to elsewhere and the loss of the triple-A credit rating have all weakened the pound since the start of year. A further fall is clearly possible, …
28th February 2013
The rise in real consumer spending in Q4 last year was the fifth in succession and, at face value, looks favourable for retail occupier demand. It is also encouraging that the adverse effects of recent retailer failures have at least been partly offset by …
27th February 2013
Respondents to the latest IPF Consensus forecasts envisage rental value growth resuming in 2014 and then accelerating in 2015. But the implication from the capital value forecasts is that yields have a little further to rise, before sitting at a plateau …
22nd February 2013
All-property rental values were unchanged in January, leaving them 0.3% lower than a year earlier. But amidst the broad stagnation at the all-property level there were some bright spots. Notably, Rest of South East office rents increased by 0.3%m/m in …
21st February 2013
Lenders have already made substantial progress in reducing the stock of commercial property loans on their books. But there is more to do and net lending flows are likely to remain negative for some time yet. By the end of 2015, our projection is that the …
15th February 2013
