Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
At the time of the 2015 election, we expect commercial property prices to be more or less unchanged from their current levels. Yet despite the low interest rate environment, the outlook for residential property is far weaker. We think that we are now in …
12th July 2010
Our analysis suggests that the UK government bond yield curve has no predictive power for commercial property yields. The yield curve is potentially useful as a tool for forecasting rents, although it adds only limited value over and above the more …
8th July 2010
With the economy in recession for much of 2009, the latest data from Strutt & Parker and IPD suggest that landlords fared reasonably well last year, retaining a high proportion of tenants and in many cases even raising rents at lease expiry. Given that …
6th July 2010
The latest PMI suggests that the rebound in commercial construction activity continued in June. This points to further growth in developers’ confidence about future property demand and rents. We agree that the rental downturn is near its end, but remain …
2nd July 2010
The latest Credit Conditions Survey suggested that the supply of credit for commercial property is likely to remain restricted, but for residential borrowers it is likely to contract again. In light of this, a cautious view on the prospects for both house …
1st July 2010
Net commercial property lending flows remained negative in May, reflecting the fact that banks’ and building societies’ exposure to the sector is still very high. Further negative lending flows are likely in the months ahead. On a brighter note, UK …
29th June 2010
The Financial Stability Report (FSR) is not designed to lay out the Bank of England’s expectations for the financial system, economy or property markets. But there was enough in today’s report to suggest that the Bank remains very concerned about the …
25th June 2010
The economy remains on track to expand again in Q2, not least because retail sales posted a solid increase of 0.6%m/m in May. However, the labour market remains fragile and the Budget measures will hit households’ finances pretty hard. Of course, the …
23rd June 2010
The time series data on cross-border commercial property investment flows have a short history. But, not surprisingly in our view, they suggest that exchange rates are a far less important influence on cross-border flows than relative value and economic …
18th June 2010
Since our last Markets Analyst, there have been growing signs that the global economic recovery, and the UK’s recovery in particular, is built on fragile foundations that will buckle under the weight of the upcoming fiscal squeeze. If the UK’s recovery …
16th June 2010
The downside risks to property prices from failed refinancing of commercial mortgage-backed securities (CMBS) could linger for much of this decade. Over the next one to two years, however, relatively few of the loans that underpin the UK’s outstanding …
14th June 2010
Past experience suggests that the current trend for investors to target the income generating qualities of the best secondary stock is a comparatively low-risk strategy. Yet, even leaving aside any possibility of a double-dip recession, the weak consumer …
10th June 2010
Upward revisions in the latest survey pushed the IPF Consensus into line with our own view that IPD all-property rental values will stabilise later this year and rise modestly in 2011. Yet, depending on the strength of the Central London office market …
7th June 2010
The latest CIPS/Markit construction PMI suggests that commercial property rental values will end 2010 higher than they started it. Given the weak economic outlook, that still seems a little optimistic to us. Elsewhere, today’s data on mergers & …
2nd June 2010
Over the next 20 to 30 years, in contrast with the flat trend that has been experienced since the 1950s, we think that real UK commercial property rental values could rise slightly. As a guide, our suggestion is that annual average real rental growth …
1st June 2010
Although the gap has narrowed, the IPF Consensus is slightly less upbeat than we are about the commercial property market’s prospects for the rest of 2010 and 2011. Thereafter, however, we remain more concerned about the outlook for capital values and …
28th May 2010
The economy grew slightly faster in Q1 (0.3%) than originally thought (0.2%), but the bigger picture is that the outlook remains soft. Employment has started to fall again and a painful fiscal squeeze is imminent. Accordingly, we expect inflation to drift …
26th May 2010
The latest De Montfort University (DMU) Lending Review makes uncomfortable reading for the commercial property market, showing that a full 20% of outstanding loans by value are now distressed. For now, with economic growth likely to continue (albeit …
21st May 2010
The latest RICS Construction Survey suggested that the sector as a whole returned to growth in Q1. Commercial property construction led that recovery, implying that developers’ optimism about the prospects for tenant demand is rising. We continue to …
20th May 2010
Our major macroeconomic forecasts have not changed since the previous Analyst and, broadly speaking, neither have our expectations for the commercial property market. We still expect capital values to rise by about 10% this year, with much of that …
18th May 2010
Although the recent upturn in the commercial construction PMI is encouraging, it does not necessarily signal a sustained and significant upturn in the commercial property supply pipeline. But even if development activity has turned a corner, this new …
14th May 2010
We think that a stronger exchange rate over the next year or so is a very real prospect. If that is right, fears may arise of an exodus of overseas investors from the UK commercial property market. We are not convinced, however, that currency plays are a …
11th May 2010
The latest PMI suggests that the rebound in commercial construction activity accelerated in April. This points to growing developer confidence in the outlook for tenant demand and rents. For now, however, we continue to think that regional occupier market …
5th May 2010
Recent property lending and pooled funds flows data may signal that the upswing in capital values will run further than is commonly assumed. However, with credit supply unlikely to ease materially anytime soon and given signs that overseas buyers may be …
4th May 2010
Respondents to the latest GVA Grimley Corporate Real Estate Survey (formerly produced in conjunction with the CBI, but now with Henley Business School) were confident about their business prospects for the next two years. However, they still plan to lower …
30th April 2010
The economy got off to a slow start in 2010, with GDP rising by just 0.2%q/q in Q1. That was well below analysts’ expectations for a rise of roughly 0.5%, and reflected a fairly big fall in distributive trades output. Against a backdrop of high debt …
28th April 2010
Industrial rental values remain on track to fall in 2010 as a whole, but last week’s CBI Industrial Trends survey pointed to a better outlook in 2011 than we have pencilled in. For now, reflecting the fact that much industrial space remains vacant and …
26th April 2010
Today’s RICS survey showed that new lettings activity rose again in Q1 and is set to remain solid over the next few quarters. This should start to soak up vacant space and we continue to expect the rental downturn to end this year. … RICS Commercial …
22nd April 2010
Commercial property’s strong start to 2010 has already left the latest IPF Consensus forecast looking a little conservative. We remain comfortable with our forecast for a 10% rise in IPD capital values in 2010 as a whole. Unlike the experience of 1993/94 …
21st April 2010
Tuesday’s BRC Retail Sales Monitor suggested that high street spending continues to hold up well. Off the high street, however, things are not so rosy, especially for spending on leisure services. Even so, over the past few years, leisure property has …
15th April 2010
With Irish investors having been such big players during the most recent commercial property boom across Europe, there are now concerns (highlighted, for example, in a recent Property Week) that the new Irish National Asset Management Agency (NAMA) may …
13th April 2010
Over the next three years, retail property is set to deliver average real capital gains of around 1% per year (roughly 3% nominal), lower than the figures of around 3% (5% nominal) in the industrial sector and up to 5% (7% nominal) in the office sector. …
7th April 2010
Commercial construction sector activity expanded for the first time in over two years in March. On the face of it, that suggests that developer confidence in the wider economic and rental value outlook is improving. But with development finance still …
6th April 2010
The latest Bank of England Credit Conditions Survey suggested that the availability of credit in both the housing and commercial property markets will continue to rise. However, any increases are likely to be modest. What’s more, the survey suggests that, …
1st April 2010
The latest Colliers CRE/Real Estate Capital survey suggested that demand for secondary property recovered alongside prime in the early stages of the year. That may reflect higher risk appetite. But an alternative, and possibly more worrying, explanation …
30th March 2010
The tone of today’s CBI/PwC Financial Services Survey was generally subdued, although an improvement in expectations about future business volumes points to a continued slowdown in the rate of decline in IPD all-office rental values this year. Elsewhere, …
29th March 2010
National Statistics’ measure of net institutional property investment was back in the black in Q4, consistent with the figures already to hand from Propertydata.com. Looking ahead, the strong inflows of funds from retail investors that have already been …
26th March 2010
The outlook for the real economy remains subdued. Although consumer spending grew in Q4 2009, high household debt levels and the weak labour market point to very little scope for further strong gains. At the same time, there is little evidence that the …
23rd March 2010
This report is only available as a PDF. Click to download. … Financial and business services sector jobs (Q4 09) …
17th March 2010
The retail sector again recorded the largest rise in capital values in February. However, the recent outperformance of the retail sector has been driven almost exclusively by retail warehouses. To us, this narrow base increases the risks that the …
16th March 2010
At the margin, the continued fall in the speculative industrial development pipeline can only be a support for medium-term rental value growth prospects in this sector. However, we still suspect that weak demand conditions will dominate, pushing …
12th March 2010
The current surge in commercial property capital values broadly mirrors the rebound seen in 1993/94 as the economy emerged from the last recession. That episode, however, gave way to renewed capital value falls as bond yields rose sharply. This time …
9th March 2010
Current commercial property derivatives prices suggest that IPD total returns this year will be markedly lower than either our expectations or the IPF Consensus forecasts. The derivatives market may be proved right. However, over the past three years the …
4th March 2010
The combination of a sluggish recovery in the economy and concerns over the UK’s fiscal position and credit rating has weighed on UK asset markets over recent weeks. The rally in the equity market has lost steam, while UK bonds have underperformed their …
3rd March 2010
Today’s CIPS/Markit Construction PMI does nothing to change our view that commercial property rental values will fall further this year. Its subdued tone was also echoed by the latest mergers & acquisitions (M&A) and property lending data. … Construction …
2nd March 2010
This report is only available as a PDF. Click to download. … IPF Consensus Forecasts (Q1 2010) …
26th February 2010
The economy remains subdued, with the public finances in a poor state, retail sales declining sharply in January and unemployment rising again. All of this simply reinforces our view that GDP will grow by just 1% this year, with inflation falling from …
24th February 2010
Over the next 4-5 years, driven by the recovery in the UK’s manufacturing sector, standard industrial annual total returns could average 10% to 11%. That would be higher than prospective returns from the other main industrial property segment, …
19th February 2010
We have revised up our near-term commercial property forecasts and expect average IPD capital values to rise by about 10% this year. That is consistent with a very strong total return of about 18%. … A rally built on shaky fundamentals (Q1 …
16th February 2010
This report is only available as a PDF. Click to download. … RICS Construction Market Survey (Q4) …
12th February 2010
