Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Divergence opens up between housing and commercial construction The April CIPS Construction PMI showed a growing divergence between the housing and commercial sectors, with activity in the latter seeing a gradual recovery while the former declined to a …
5th May 2023
The latest RICS Construction Survey showed an improvement in construction workloads and surveyors’ expectations also brightened. That is in line with other data showing the economy is proving more resilient than expected. That said, we still expect a mild …
4th May 2023
Net lending stable as investors wait for the bottom Even as commercial property investment has collapsed, net lending to property has been stable at close to zero since the start of the year. That suggests investors are building up war chests to snap up …
Occupier demand ticks up, but further falls in rents and capital values likely After a weak end to 2022, surveyors reported that occupier demand was essentially flat in Q1. All sectors saw an improvement and that suggests take-up will pick-up in Q2. That …
27th April 2023
Construction activity holds up as housing enters the doldrums The March headline CIPS Construction PMI reversed some of its surprise jump in February, but it remained in expansionary territory. That was driven by the commercial sector, where strong …
6th April 2023
Net lending turns negative as investors hold back Net lending to property turned negative in February, as investors held back in the face of falling capital values. But the decline was small and even though the recent banking crisis will lead to some …
29th March 2023
Construction activity rebounds The headline CIPS construction index rebounded back into expansionary territory in February and the forward-looking indicators also showed further improvement. Commercial developers may be taking advantage of lower input …
6th March 2023
Terrible 2022 helps boost outlook for 2023 The latest IPF Consensus Survey showed a modest upgrade to forecasts for total returns in 2023, driven by an uplift to the capital value view. That looks to reflect the larger-than-expected fall in capital values …
1st March 2023
Net lending holds up as even as investment collapses Net lending to property was once again positive in January, even as commercial property investment collapsed in the final quarter of last year. Investors may be preparing to re-enter the market and …
Commercial and housing activity falls further, but expectations brighten The headline CIPS construction index showed a contraction in activity in January, with the housing index seeing a substantial decline. But the forward-looking indicators improved, …
6th February 2023
Banks still willing to lend even as capital values fall Even as investors have pulled back from the market, net lending to property remained positive in December. That may reflect some distressed borrowing as investors looks to boost liquidity in the face …
31st January 2023
Occupier demand contracts further as the economy slows The slowing economy led to a further fall in occupier demand in Q4, with retail seeing the largest contraction. So far, the fall in rental expectations has been relatively modest and surveyors expect …
26th January 2023
Demand for mortgages collapses due to spike in mortgage rates The Q4 2022 Credit Conditions Survey shows that while lenders tightened lending criteria in the aftermath of the “mini” budget, the main constraint on lending volumes was a collapse in demand …
19th January 2023
Construction activity contracts as profits decline The latest RICS Construction Survey showed the first contraction in workloads since the height of the COVID-19 pandemic in mid-2020. Weakening demand and rising financing costs are cutting profits and …
12th January 2023
Headline index falls below 50 as recession hits property demand The headline CIPS construction index fell below 50 in December, indicating a contraction in activity, as the recession hit demand and developers’ concerns about capital values increased. With …
6th January 2023
Net lending rises further despite worsening outlook Net lending to property accelerated in November to an 11-month high. But given the worsening economic and property outlook we expect it will soon go into reverse. Indeed, investment activity is now …
4th January 2023
Headline index starts to fall as recession cuts demand As expected, the headline CIPS construction index retreated in November as falling demand outweighed the benefit of easing prices and an increase in the availability of contractors. As the recession …
6th December 2022
Further downgrades as yields rise and rental growth falls back The latest IPF Consensus Survey showed further significant downgrades for total returns in 2022 and 2023, as higher interest rates have boosted yields and a looming recession cuts rental …
30th November 2022
Net lending sees further gains even as capital values fall Falling capital values have not yet deterred commercial property investors, with net lending to property increasing for the second month in a row in October. Bargain hunters may have given lending …
29th November 2022
Improvement in headline index will not last long As was the case last month, an improvement in delivery times and subcontractor availability drove a surprise rise on the headline construction PMI in October. But a slowing economy and higher financing …
4th November 2022
Construction activity set to slow as financing constraints bite The latest RICS Construction Survey showed a rise in workloads in Q3, although the gain was small. Looking ahead, a slowing economy and higher financing costs will soon lead to a cut in …
3rd November 2022
Investor caution to weigh on net lending Net lending to commercial property was positive in September but, looking through the monthly volatility, there is a clear downward trend in lending. With the economy entering a recession and property yields now …
31st October 2022
Occupier demand falls as economy slows The slowing economy and cost-of-living crisis are now having a clear impact on occupier demand, with surveyors reporting the first drop since the start of 2021. That has fed through to rent and capital value …
27th October 2022
Credit conditions already tightening prior to market turmoil The Q3 credit conditions survey doesn’t capture the impact of the market turmoil of recent weeks, with the deadline for responses falling a week before the “mini-budget”. Nonetheless, it shows …
13th October 2022
Improving supply chains temporarily boost construction activity The surprise increase in the construction PMI reflected an improvement on the supply side, as easing demand cut delivery times and improved contractor availability. But a slowing economy …
6th October 2022
Economic headwinds weigh on lending to property Net lending to commercial property was negative for the second consecutive month as economic headwinds weighed on investor sentiment. With the cost-of-living crisis constraining rental growth and rising …
30th September 2022
Higher property yields cut total return forecasts in 2022 and 2023 The latest IPF Consensus Survey showed a significant downgrade for total returns in 2022 and 2023, as higher yields hit capital value forecasts. But with those hikes in yields now …
7th September 2022
Rise masks deteriorating outlook The surprise increase in the construction PMI is little cause for optimism given it was driven by the reversal of an idiosyncratic fall in civil engineering activity a month earlier. Indeed, the commercial activity …
6th September 2022
Net lending to property falls back as headwinds strengthen Net lending to the commercial property sector fell back in July, as mounting economic headwinds and stretched valuations weighed on investor sentiment. We expect lending will see further …
30th August 2022
Higher interest rates to weigh on construction activity in H2 The latest RICS Construction Survey showed a further rise in workloads during Q2, though sentiment for the next 12 months worsened slightly. With labour and supply shortages remaining a major …
4th August 2022
Optimism misplaced as activity slows The fourth consecutive decline in the headline construction PMI took the index below 50 for the first time since January 2021. While driven by an idiosyncratic drop in civil engineering activity, the upbeat new orders …
Net lending to property ticks up, but improvement will be short-lived Lending activity in the commercial property sector surprised on the upside in June, driven by a rise in net lending to standing property investments. But looking ahead, rising interest …
29th July 2022
Recovery in occupier activity proves short-lived After briefly recovering in Q1, the latest RICS survey showed that occupier demand dropped back in Q2 as concerns over the economic outlook and cost pressures weighed on activity. Both rental and capital …
28th July 2022
Lenders to tighten credit standards even as demand softens The Q2 credit conditions survey shows that lenders will not loosen credit conditions to keep the house price boom going like they did in 2004-2007. Indeed, despite the fact demand is expected to …
14th July 2022
Slowdown in construction activity intensifies in June The third consecutive monthly fall in the construction PMI suggests that that growth in development activity is slowing. The near-term outlook has also deteriorated, with growth in new orders easing …
6th July 2022
Net lending cools in line with weaker investment activity Lending activity in the commercial property sector cooled in May, consistent with the weaker investment data seen in recent months. Looking ahead, we expect rising interest rates and high property …
1st July 2022
Construction sentiment worsens as economic headwinds mount The second consecutive fall in the construction PMI in May points to a sustained slowdown in development activity. And with the new orders balance easing and optimism of future demand declining, a …
8th June 2022
Net lending defied economic headwinds in April Net lending to property rose sharply in April, after three consecutive months of easing. But the latest jump is most likely a once-off as we expect that credit demand will be dented by rising interest rates …
31st May 2022
Strong Q1 performance pushes 2022 forecasts higher The latest IPF Consensus Survey indicates that the outlook for this year is stronger than expected three months ago, though after 2022 forecasts were more pessimistic. Our view remains more downbeat than …
27th May 2022
Reality bites as PMI shows signs of a slowdown in activity The construction PMI for April showed that building activity remained solid, but that the pace of growth has slowed. An easing in new orders growth also hints at a further slowdown ahead, as the …
6th May 2022
Construction sector activity to face rising pressures in short term The latest RICS Construction Survey indicated that activity in Q1 remained solid, while sentiment about for the next 12 months remained optimistic. But it also showed that labour and …
5th May 2022
Subdued net lending expected to be the norm in the near term Net lending to property eased for a third consecutive month in March, but continued to show growth. We expect increasing economic headwinds and structural changes within some sectors to weigh on …
4th May 2022
Office and retail occupier activity stages a comeback The latest RICS survey showed that office and retail occupier activity improved significantly in Q1 and that respondents were more positive about the prospects for property over the next 12 months. But …
28th April 2022
Rising market rates tighten conditions Banks expect mortgage availability to fall back in Q2 as lenders push up borrowing rates to reflect increases in Bank Rate, but other lending criteria are expected to be stable or loosen. The availability of mortgage …
14th April 2022
PMI results mixed, with more concern on the horizon The continued strength of the construction PMI in March suggests that activity in the sector increased despite ongoing headwinds from supply constraints and cost inflation. The rise in new orders …
6th April 2022
Modest net lending set to continue Net lending to property eased further in February, though it remained in positive territory. We expect lending trends to remain fairly subdued as both economic and sector specific challenges loom over the coming months. …
29th March 2022
PMI rises further as housing activity accelerates The construction PMI rose to its highest level in eleven months in February. Although encouraging, supply constraints remain a major impediment and input costs high, which we think will limit growth in the …
4th March 2022
Net lending starts year on softer note Net lending to property fell back in January, after reaching its highest level in 18 months in December. But overall net lending remained in positive territory, though we expect a number of challenges to limit any …
1st March 2022
Industrial steers better outlook for 2022 returns The latest IPF Consensus Survey suggests that commercial property will have a better year than initially thought. Our total returns forecast for 2022 is in line with that of consensus, but beyond this year …
25th February 2022
PMI bounces back in January with commercial activity at the helm In contrast to the decline at the end of last year, the construction PMI rose to its highest level in six months in January. There were also encouraging signs that supply and cost issues …
4th February 2022