Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
One of the unforeseen consequences of the homeworking revolution is its negative impact on city centre retail footfall. The evidence suggests that in urban centres there is a link between higher levels of remote work and poorer retail performance, which …
13th May 2022
Our new, higher, UK interest rate forecast means we now expect commercial property yields will start to rise by the end of this year, earlier than in our previous profile. Intensifying inflationary pressures led us to revise our forecasts in our latest UK …
29th April 2022
We think the recent upturn in office market performance is largely down to the one-off release of pent-up demand and remain downbeat about future prospects. With occupancy still languishing and remote working firmly established, we think that the risks to …
21st April 2022
Investor interest in the life sciences sector has jumped since the onset of the pandemic. Increased investment and employment opportunities are expected to continue to support demand for related office space, with UK centres, notably Oxford and Cambridge, …
14th April 2022
Rising interest rates have put the outlook for property prices back under the spotlight. But, with lending practices much more restrained in this cycle and the market level loan-to-value ratio well below 50%, we don’t feel overly concerned at the prospect …
7th April 2022
The rental growth premium enjoyed by Central London shops has disappeared in the pandemic. And we don’t expect it to reopen, as lower footfall in the capital, the slow recovery in tourist arrivals and higher vacancy rates weigh on rental growth. All …
1st April 2022
The latest data from the industrial sector were predictably upbeat with strong take-up and dwindling supply driving rapid rental growth. There were also signs of important shifts across UK markets that we think may be significant enough to re-cast our …
25th March 2022
Shopping centres were the hardest hit commercial property sector during the pandemic. The latest data hint that the sector may be past the worst. But the outlook remains clouded by the threat of online shopping and weak in-store retail spending. …
23rd March 2022
At the start of the Ukraine crisis, we felt the direct property impact would be modest, based on limited Russian ownership and capital flows. But as the conflict extends into a third week, concerns have risen about the macroeconomic impacts of the …
11th March 2022
The South East jobs market turned a corner during the second half of 2021. But while occupier activity has picked up, vacancy has also risen. As a result of this, and the effects of economic headwinds and remote working, we only expect to see modest …
10th March 2022
Much has been made of UK property’s openness to Russian money following the invasion of Ukraine. But since the depreciation of the Russian ruble in 2014, Russians have become far less important to demand. As a result, we think the effects on UK property …
25th February 2022
The exceptionally strong rebound in commercial property returns has been clear from the middle of last year. While this came earlier than most expected, we think it reflected special conditions and won’t last. Despite increased uncertainty from the …
11th February 2022
There is a perception that a shift in workspace preferences brought about by the pandemic has redirected demand towards higher quality office space. But while there is some evidence of a flight to quality in Central London office data, the evidence is …
28th January 2022
The industrial sector had its best year in over three decades in 2021 as demand soared and supply struggled to keep up. Although we expect the sector to perform well again this year, we don’t think that yields can continue to fall at the rate seen in …
20th January 2022
Real estate potentially has a significant role to play in helping achieve ambitious climate targets. We have estimated the size of the risks in the transition to net zero for the commercial property markets that we cover. This risk varies widely across …
14th January 2022
Recent data have reinforced concerns about inflation risks in the UK. We remain of the view that property investments provide only limited long-term protection against higher prices, but of the individual asset types, we think industrial and residential …
The performance of commercial property exceeded expectations in 2021, with a particularly strong contribution from the industrial sector. But we don’t think that this momentum will last into this year, with high inflation and four interest rate hikes in …
7th January 2022
The recent sale of a 25% share of the Bluewater shopping centre has provided further evidence of the slump in retail values. And while there are signs that the worst of the correction may now be over, we don’t think that a turnaround is likely soon. The …
24th December 2021
International travel restrictions and domestic containment measures have dealt the hotel sector a massive blow over the last two years. The outlook for the sector is more positive, but a slow relaxation of restrictions, tourist hesitancy and reduced …
22nd December 2021
The rapid bounce-back in the US economy along with still-loose monetary policy will drive continued strong performance in real estate in 2022, when we expect returns to exceed 12%. That would see the US outperform the UK and euro-zone by 5%-pts and 3%-pts …
15th December 2021
Investment activity has bounced back sharply after the initial COVID-19 shock and is on track to hit a three-year high in 2021. But we expect more modest growth in 2022 as softer economic activity and structural factors in some sectors weigh on …
Office space under construction declined for a third consecutive quarter according to the Winter London Crane Survey, despite an uptick in new starts. Given the challenges the office sector faces, we believe that activity is likely to decrease even …
10th December 2021
The Omicron variant has heightened the near-term risks for both the economy and UK commercial property. The latest restrictions show that there is still considerable uncertainty, but our estimates suggest that the downside is limited and the sector should …
9th December 2021
Over the last two years, serviced offices have seen more upheaval than most other real estate sectors. But there have been some encouraging signs over recent quarters and long-term trends may have moved in their favour, though we don’t expect improved …
25th November 2021
The latest real estate data came in stronger than expected. But while there have been encouraging developments, particularly in the retail sector, we think this signals a short-term boost to prospects rather than a permanent improvement. The further …
11th November 2021
By any standard, retail property has had a torrid time during the pandemic. The latest data on online sales look like further bad news, with the share of spending much higher than expected after lockdowns. But the recovery in consumer demand has also been …
21st October 2021
With workers spending more time away from city centres, some expected that out-of-town offices could swing back into fashion. It is still early, but from the UK data, the evidence suggests that it is suburban retail, not offices, that is benefiting most …
15th October 2021
UK employment has recovered strongly in recent quarters and is set to see further growth into 2022. This will be good news for UK offices, especially in regional cities. But with occupiers set to look beyond headcount when making their space decisions, we …
7th October 2021
With UK policy rates now set to rise as early as next spring, this has tipped the risks to our commercial property outlook to the downside. But we don’t think the change is significant enough to make a wholesale downgrade to our view. Recent developments …
30th September 2021
The Evergrande crisis has made waves in financial markets this week. But, while the developed property markets we cover may see some short-term upheaval, we think the impacts outside of China are unlikely to be severe or lasting. For property investors, …
23rd September 2021
One feature of the COVID-19 era has been persistent non-payment of rents, particularly in the retail and leisure sectors. But we don’t think this will come to a head next year once the eviction ban lifts, as by then the economy should be in better shape …
17th September 2021
The most recent commercial property data have been surprisingly upbeat and have raised the possibility that the recovery could be stronger than expected. But we think investors may have run ahead of themselves and this trend is unlikely to be sustained …
16th September 2021
With more hybrid working post-pandemic, the view is that office rents will be under pressure for many years. This raises questions about which locations could be more resilient and if rents in central business districts (CBDs) will perform better than …
8th September 2021
New plans have extended Permitted Development Rights (PDRs) on commercial property, allowing swifter conversion to residential use. These have been cautiously welcomed, but, in our view, they do not radically shift the outlook for either residential or …
18th August 2021
The supermarket yield spread to “all-retail” has grown to almost the level it reached in 2009. However, we think there are good reasons for this. Admittedly there are risks ahead for the sector that could dent future prospects, but for now, supermarkets …
22nd July 2021
While longer-term drivers are supportive of flexible offices, we think demand for space will be held back by the slow return of workers to the office, by more competition from home offices and by high levels of cheap, vacant traditional space. A year ago, …
20th July 2021
While London rents are set to reverse some of the fall of the past year, we doubt the premium of rents in the capital over the national average will return to its pre-virus level. But outside London rental growth is set to accelerate sharply. London …
13th July 2021
Although we expect the economic outlook will continue to improve, we think that South East office rents will still edge lower this year. What’s more, we don’t expect much of a rebound in 2022, as a shift to remote working will continue to weigh on demand. …
7th July 2021
The government’s furlough scheme is regarded as one of the successes of the UK’s coronavirus policy response, but all good things must come to an end. Over the next few months, its unwinding will bring some risks, though we do not expect these to have a …
2nd July 2021
We think that delayed Central London office projects and new industrial starts will drive commercial construction output this year. But once the backlog of delayed projects has been exhausted, we think structural factors and high costs will deter …
24th June 2021
A year ago, we were just digesting the impact of remote working, but already permanent change looked likely. And while we know more now and continue to refine our views, we see little reason to change our conclusions from last summer that office demand …
23rd June 2021
Recent strong inflation data have heightened concerns about global price pressures. At present, we think there will be limited impact on short-term property performance. Further out though, higher inflation expectations reinforce the view that bond yields …
16th June 2021
Upbeat economic data suggest that consumers have been flocking back to the shops since the reopening of non-essential retail in April. But this is probably not enough to turn around the fortunes of a troubled sector yet. After all, the strong bounce in …
14th June 2021
With emission targets needing to be met by 2030, the race is on for the real estate sector to decarbonise. By forcing tenants and landlords to share the risks, benefits and costs of environmental policies, green commercial leases are a promising tool, and …
10th June 2021
The acceleration of structural shifts is likely to result in some conversion of retail and to a lesser extent office space to urban logistics use. However, we think these conversions will be relatively limited given the significant shortfall in values …
9th June 2021
Retail has been the hardest hit of the major sectors during the pandemic, though hope is returning with the re-opening of economies. But new challenges are emerging. In particular, we think that more home working will divert (already-weak) instore retail …
18th May 2021
More working from home will inevitably change cities as we know them. However, cities are more than just workers. This means that cities where a higher share of jobs can be done remotely are not necessarily the ones where the impact of remote working on …
5th May 2021
After a 20% y/y fall in 2020, we think the economic recovery in H2 and some pent-up demand will support an improvement in investment activity this year. Though we estimate that totals will rise by 25% y/y to £50bn this year, this would still make it a …
30th April 2021
Although last year probably marked a low point for lending towards commercial property, we expect the recovery will be subdued this year. After all, lenders have indicated that the availability of credit will remain weak in the coming months and a slow …
23rd April 2021
At face value, news of a marked rise in industrial completions this year should imply that rents may come under pressure soon. However, we expect strong occupier demand and the limited amount of speculative space to support rental growth in the sector. In …
14th April 2021