Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
All-property yields moved up modestly in 2012, in line with our forecasts, but we think that this small adjustment is now all but over. Equally, however, renewed falls in yields and rises in capital values are unlikely until late this year at the …
12th February 2013
The recent rises in UK bond yields have been far too small to make much of a dent in the already-high property/bond yield spread and, in any event, are likely to go into reverse. Indeed, we think that the UK commercial property market will take the latest …
7th February 2013
Overall construction activity edged down again in January, although the commercial property sector managed to hold steady. On past form, these data suggest that developers do not anticipate occupier demand being strong enough this year to stimulate a …
4th February 2013
Net commercial property lending was negative again in December and it seems likely that this pattern will continue for some time yet. However, it is encouraging that there remains little evidence of foreclosures and fire-sales. … Lending to commercial …
30th January 2013
Today’s RICS survey showed that occupier demand remains soft and that surveyors envisage unchanged rental values over the next three to six months. That looks plausible to us, although the risks are tilted to the downside. … RICS Commercial Property …
29th January 2013
On Property Archive data, the value of investment market activity in December rose to £3.1bn, up by £0.2bn from November. Investment in offices accounted for nearly half of this total, and the office sector saw £4bn of transactions for Q4 overall, a …
28th January 2013
Two years after the initial proposal, and having appeared to have gone cold on the idea in the meantime, the Government finally looks set to allow permission-free conversions of commercial property into residential use. This is a good move and we are …
22nd January 2013
Today’s CBI/PwC data add to other evidence that continued near-term gains in London City and West End office rents are more likely than not. But with the economy unlikely to grow to any meaningful degree until next year, medium-term downside risks to …
21st January 2013
The recent clutch of retailer failures probably won’t be the last and they increase the downside risks to rents this year. But not all retailers are struggling and recent administrations are more likely to raise the gap between rents in core and secondary …
18th January 2013
The problems of legacy loans, along with increased regulation, are both significant barriers to the Funding for Lending Scheme (FLS) boosting new commercial property lending. But there are signs that the FLS is helping wider corporate lending, which, …
16th January 2013
Anecdotal evidence suggests that there has recently been a rise in the number of tenants deciding to migrate away from the West End office market because of high occupation costs. It is difficult to see this being a catalyst for a collapse in West End …
8th January 2013
Net commercial property lending was negative again in November, taking the run of sub-zero readings to 12 months. Credit availability may improve a little in the coming quarters, but with the economic outlook still weak and borrower demand subdued, a …
4th January 2013
The tone of both of today’s commercial property data releases was downbeat. Although the latest Bank of England survey showed that credit supply in the sector has improved slightly, borrowers are not rushing to take on new loans. Meanwhile, new commercial …
3rd January 2013
For the 11th quarter of the past 12, Q3 saw UK-based investing institutions make net purchases of commercial property. However, institutions’ allocations to the sector remain very low by past standards. That might point to the potential for institutions …
20th December 2012
All-property capital values fell by 4% in the year to November, with adverse yield impact accounting for about 3%-points of that decline. Central London offices continue to outperform, with shopping centres and Rest of UK offices underperforming. However, …
19th December 2012
The number of financial & business services (FBS) sector jobs hit a fresh record high in Q3. For now, we continue to pencil in falls in City and West End office rents in 2013. But the persistent strength of FBS jobs is a clear upside risk to that view. …
12th December 2012
Rather than the direct measures announced (e.g. REIT changes), the more relevant aspect of the Autumn Statement for the commercial property sector was probably the confirmation that a strong economic recovery remains some way off. As such, broad-based …
11th December 2012
There were few surprises in this Autumn Statement, which simply represented a continuation of the existing strategy. The Statement will do little to get the economy out of its current malaise and a triple-dip remains a real threat. … Autumn Statement …
5th December 2012
The CIPS/Markit construction PMI suggests that commercial property developers have become more rather than less cautious about the occupier demand outlook, while weak mergers & acquisitions data also highlighted tough business conditions. A sustained …
4th December 2012
Our sense is that investor sentiment has improved in recent months and some are now starting to look ahead to the next commercial property recovery. Accordingly, although the current downturn is not over just yet, we think it is right to pencil in …
3rd December 2012
Respondents to the latest IPF Consensus forecasts envisage rental values beginning to edge higher next year. But with capital values also expected to drop further in 2013, the implication is that any falls in yields next year are not on many forecasters’ …
30th November 2012
Net commercial property lending was negative for the 11th consecutive month in October. However, while lenders continue to make progress on working out nonperforming loans, uncertainty and the weak economic outlook suggest that commercial property credit …
29th November 2012
The latest Colliers/ Real Estate Capital survey suggests that secondary property yields have ticked down in recent months. It is too early to be sure that this is a start of a new trend. But these data do at least add to other evidence that some investors …
26th November 2012
UK asset prices have been undermined by fading expectations of more monetary stimulus and the partial reversal of safe-haven demand as euro-zone concerns have eased. Although a cut in official interest rates now seems unlikely, we continue to expect the …
22nd November 2012
Over the past few months, the fledgling South East office occupier market recovery has continued. And given that this region has an above-average exposure to the technology sector of the economy, which is likely to outperform over the medium term, South …
The Chancellor remains hemmed in by the fiscal position. Indeed, he may well have to choose between introducing even more austerity in the Autumn Statement and letting at least one of his fiscal rules slide. … Autumn Statement 2012 …
IPD all-property initial yields were unchanged in October, but the small drop in rents meant that capital values fell further. Indeed, there have now been 12 consecutive monthly falls in capital values, with the cumulative drop over that period having …
20th November 2012
The economy is set to expand over the next year or two, but only slowly, preventing a strong rebound in property rents. Even so, investor confidence is showing signs of life and we think the current upward drift in yields will start to reverse in 2013. …
13th November 2012
The latest corporate insolvencies data were the best in more than four years and our GDP forecasts suggest that the worst may now have passed for business failures. This should help to ease investors’ concerns about the security of rental income streams, …
8th November 2012
It is no surprise to us that leisure has recently been one of the best performing segments of the commercial property market. And with consumer spending on recreational activities set to expand at a slow yet steady pace over the next year or two, combined …
6th November 2012
A modest rise in construction activity in October did not change the bigger picture of a sector that is still very subdued. And in the commercial sector, activity barely moved from the two and a half year low reached in September. … CIPS/Markit …
2nd November 2012
Measured as a share of outstanding loans, lenders’ exposure to commercial property hit a seven and a half year low in Q3. Nevertheless, credit conditions in the commercial property sector are unlikely to ease any time soon. … Lending to commercial …
29th October 2012
The results from the latest IPD/Strutt & Parker Lease Events Review, including more break clauses being exercised and the tenant default rate rising, confirm that the past year has been another tough one for many commercial property landlords. But with …
25th October 2012
Today’s RICS data suggest that commercial property developers anticipate occupier demand remaining soft, consistent with mild, near-term falls in IPD all-property rental values. We certainly agree that downside risks to rents dominate upside. … RICS …
24th October 2012
All-property initial yields edged up again in September, from 6.34% to 6.36%. As a result, capital values continued to drift lower, down by 0.4%m/m and 3.1%y/y. The drop in September was the 11th consecutive monthly fall. … Modest yield increases …
23rd October 2012
At the margin, this week’s Allsop auction results and the withdrawal of RBS from the Asset Protection Scheme (APS) both support the growing sense that sentiment towards the commercial property market may be at, or at least close to, a turning point. … …
18th October 2012
It is increasingly clear that certain types and grades of industrial property, e.g. prime distribution warehouses, are experiencing the early stages of an occupier market recovery. Given the weak economic backdrop, we doubt that this upturn will encompass …
17th October 2012
Today’s RICS survey showed that occupier demand for property remained weak in Q3 and availability rose further. Of course, that is consistent with the weak economic backdrop. To us, the downside risks to rents still dominate upside. … RICS Commercial …
12th October 2012
We doubt that any recovery in IPD all-property capital values will come quite as soon or be quite as strong as is currently indicated by real estate equity prices. But, equally, we would not be surprised to see the early signs of a recovery in physical …
9th October 2012
Although activity in the wider construction sector edged up a fraction in September, activity in the commercial sector continued to soften. That suggests that confidence in the prospects of an economic recovery and a renewed upturn in commercial property …
2nd October 2012
August was the ninth consecutive month of negative net commercial property lending flows. Unfortunately, it is hard to avoid the conclusion that tough conditions in the property lending market are set to remain in place in 2013. … Lending to commercial …
1st October 2012
On past form, the weakness of today’s CBI/PwC Financial Services Survey suggests that, over the next nine to 12 months, Central London office rental values could fall by as much as 10%. To us, that looks overdone. But it does re-emphasise the downside …
All-property initial yields edged up again in August. At 6.34%, they are now 15bps higher than the November 2011 trough. Thanks to the small fall in rents and slight rise in yields, capital values dropped by a further 0.3%m/m in August. That was the 10th …
27th September 2012
Respondents to the latest Bank of England Credit Conditions survey reported a sharp rise in the availability of mortgage finance in Q3 and expect this to continue over the next three months. By contrast, commercial property credit remains restricted. …
26th September 2012
Official data show that a run of net buying of property by UK investing institutions came to an end in Q2. And Property Archive data show that this net selling continued in July and August. Experience suggests that this is another sign that capital values …
25th September 2012
A simple projection for demand, supply and vacancy rates suggests that our forecasts for 5% falls in Central London office rents in both 2013 and 2014 remain on track. There is a risk that those falls take a little longer to materialise, but, for now, our …
20th September 2012
The current boom in Central London standard shop capital values will eventually be put into reverse by a rise in yields. The most likely catalyst for this is shaping up to be a resolution of the euro-zone crisis, a stronger global economy and a drop in …
19th September 2012
The number of financial & business services (FBS) sector jobs hit a new record high in Q2. With new development completions set to be high next year and in 2014, fresh falls in Central London office rents remain our central forecast. But the strong FBS …
12th September 2012
Property Archive’s transactions-based all-property yield recently rose to its highest level since mid-2009. However, not least because the office sector has comparatively high yields and its share of total transactions has risen, the increase in the …
11th September 2012
