Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
While investment in build-to-rent developments has been notably resilient over the past year, we continue to think that the growth of the sector will be slow for two reasons. First, high house prices relative to rents means that build-to-rent investors …
7th April 2021
Though retail warehouse rents saw their largest ever annual fall in 2020, this drop was not as deep as in other retail sub-sectors. Looking ahead, while a higher level of remote working than before the pandemic is likely to continue supporting out-of-town …
1st April 2021
With office occupiers cutting space requirements, London office vacancy has climbed sharply. Our estimates suggest that vacancy is likely to rise even further over the next year or so and we have revised down our rental forecasts as a result. With tenants …
26th March 2021
Thanks to changing consumption patterns and structural and cyclical knocks to the traditional property sectors, both occupier and investor demand for data centres set new records last year. But, while further strong growth is likely, we don’t expect these …
19th March 2021
Despite the lockdown, a recent pick-up in footfall suggests that people are returning to the capital, which, if it continues as non-essential stores re-open, would be welcome news for London’s hard-hit retailers. But we think a slow return of office …
10th March 2021
We think the recent jump in bond yields will not continue and, though we think that they are unlikely to drop back to their previous lows, supportive valuations against bonds will limit upward pressure on commercial property yields. As seen in other …
8th March 2021
In light of our latest long-term economic and financial market forecasts, we have revisited our views for commercial property performance over the next three decades. We think that average returns will be lower than in the recent past, but that property …
1st March 2021
The spread of performance between UK commercial property sectors hit an all-time high in 2020, with retail spiralling into a GFC-like slump, while industrial barely flinched. This gap will narrow, but not disappear, weighing on the strength of the …
11th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
The final few months of MSCI monthly data for 2020 suggest that the fall in capital values last year was not as bad as we anticipated. But we still think a prolonged period of tight restrictions and the end of the eviction ban will mean that values fall …
29th January 2021
Although rental growth prospects for prime property are weak compared to recent years, the outlook is better than for secondary property. As such, we think that investors will continue to focus on prime assets this year, allowing prime office and …
18th January 2021
After hitting a decade-low in 2020, we think that commercial property returns will turn positive in 2021, but any improvement is likely to be modest. This reflects the delayed recovery in the economy following tougher restrictions in Q1 and continued …
11th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
5th January 2021
Despite all the current gloom about COVID-19, the outlook for next year has been brightened by the vaccination programme. While we don’t think this will be enough to prevent further falls in capital values, property transactions should benefit, though any …
23rd December 2020
Office completions are set to rise again in Central London next year. We think this will mark the peak for this development cycle in London though, as an increase in remote working will dim the outlook for occupier demand, weighing on development starts …
16th December 2020
With open-ended funds gated for much of the year, net outflows have not been as high as in recent years. But net outflows have picked up pace in recent months and we think this will continue as a result of the increased risk of a no deal Brexit in the …
11th December 2020
The confirmation of an effective vaccine in recent weeks has improved the economic outlook. But rising unemployment, a higher exposure to smaller retailers and ongoing travel restrictions will result in standard shop rents continuing to fall next year. …
8th December 2020
News about a vaccine has boosted financial markets and we have revised up our global economic expectations for the next two years or so. But while we think that this bodes well for the medium term, next year is still likely to be tough for most property …
2nd December 2020
Third quarter data make it look increasingly likely that our year-end price forecasts will prove to be too negative. However, with the UK still on course for a capital value fall of close to 10% this year, this doesn’t necessarily mean that the US or …
12th November 2020
Commercial property transactions are likely to end the year around 40% down on 2019 totals. And with the prospect of an extended lockdown this winter, a slower economic recovery and falling capital values, this will weigh on transactions well into 2021. …
3rd November 2020
Recent developments point to a weaker short-term economic outlook in the UK. In our view, this will weigh most heavily on next year’s office sector recovery and suggests that the turnaround that we expected in all-property capital values is now in the …
28th October 2020
An abrupt U-turn on workers returning to their offices last month signalled that the virus will continue to dominate lives in the UK into next year. In fact, we think office working may never quite be the same. As more remote working could reduce space …
19th October 2020
In the current environment, bank lending to property will likely stay weak. Moreover, falling values are expected to lead to an estimated £30bn re-financing gap in the coming years, which will put pressure on investors to find other forms of finance or …
16th October 2020
Along with difficulty in conducting viewings, London’s hard-hit hospitality and leisure sectors meant that there was a sharp fall in multi-let industrial take-up in H1. While availability is likely to rise further in the coming months on the back of …
9th October 2020
The resurgence in virus cases in the UK has led the government to reverse its advice on returning to the office. Given that many workers continued to work from home anyway, the impact of this change in policy is likely to be limited. That said, the new …
2nd October 2020
While we continue to think that this year’s property downturn will be milder than in past cycles, next year’s recovery is looking more fragile. This in part reflects revisions to our economic view, but also structural changes which are weighing on the …
1st October 2020
News that the government has extended the ban on commercial property evictions will be welcomed by tenants, especially in the hard-hit retail and hospitality sectors. But, already facing high levels of rent arrears, this will be a further strain on …
22nd September 2020
Our analysis suggests that UK commercial property is fairly valued when compared to the pricing of alternative assets. However, with that finding based on the assumption that current income streams are sustained, we think that it is unlikely to provide …
18th September 2020
Shopping centres are likely to suffer in the near term as people avoid enclosed spaces, shop more online and as retailers continue to go bust or consolidate space. Since mid-2018, rents have deteriorated fastest in larger centres, and we think this trend …
10th September 2020
The impact of the pandemic on property has superseded that of Brexit, but that’s not to say that Brexit risks can or should be fully discounted. While we expect a slim deal to be agreed this year, we don’t envisage it having a notable upside effect on …
28th August 2020
Travel restrictions and caution shown by holidaymakers have hit the hotel sector hard. While there has been a boost from the temporary cut in VAT for hospitality and tourism, weak global growth and virus-related restrictions and uncertainty will continue …
11th August 2020
We expect office-based employment growth to be faster than total employment growth by around 0.3-0.5% ppts each year over the next decade in the US, the UK and the euro-zone. The coronavirus crisis will dampen the outlook in the short run, but the less …
4th August 2020
The strength of industrial take-up in Q2 was driven by a ramp-up in delivery capacity, particularly by supermarkets and Amazon. Along with the continued upward trend in the MSCI monthly data, this suggests potential upside risk to our industrial rental …
24th July 2020
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
The most recent UK economic indicators have been better than expected. This suggests potential upside to our commercial property rental forecasts. But there are significant uncertainties ahead and, with activity expected to be well behind its pre-virus …
9th July 2020
While all-property capital values lag real estate equity prices, the movement in REIT prices can also tell us something about sector performance. The staggered recovery in REITs from March’s low point supports our view that capital values for industrial …
3rd July 2020
UK retailers continue to suffer, even given the recent re-opening of shops and signs of improving sales. Shopping centres have fared worst and this has been highlighted by the woes of owner Intu. And as some of the underperformance reflects deeper …
26th June 2020
While there has been a decline in the number of pubs, revenues had been rising in recent years. This has led to some big deals in the sector and falling prime yields. Nevertheless, when pubs re-open, social distancing and reduced tourism are likely to …
19th June 2020
While demand for student accommodation has risen during past downturns, we expect it will be very different this time. Uncertainty around face-to-face lectures and travel restrictions could lead to falls in demand for student accommodation for 2020-21. …
16th June 2020
The latest IPF Consensus Forecasts revealed sharper than expected downgrades for the next few years, largely based on revisions to retail rents. Our views are now above this consensus, though we don’t see this as good enough cause for a further downgrade. …
12th June 2020
A reasonable proportion of the Central London office completions for this year are likely to be pushed into 2021, but a fall in employment will hit demand for office space and lead to a pick-up in vacancy. This will put downward pressure on rental values, …
9th June 2020
Easing movement restrictions, combined with government support and strong underlying demand will allow housebuilding to bounce back fairly quickly. But weak occupier demand and falling capital values mean the recovery in commercial property construction …
15th May 2020
Data from Europe suggest that the relationship between working from home and office space per worker is weak. And even if working from home becomes more prevalent in the next few years, we think that the most important driver of occupier demand will be …
11th May 2020
In light of the pandemic, our forecasts for developed market commercial property returns have been revised lower. Nevertheless, the relativities between the key markets are broadly unchanged, meaning that we still expect the US to outperform the UK and …
6th May 2020
While there are fewer concerns that this property downturn could bring problems for lenders than during the GFC, financial risks remain, especially on the landlord side. In past recessions, occupiers and landlords have always suffered . Firms cut jobs or …
24th April 2020
Due to the spread of COVID-19, it is increasingly likely that investment activity will slump to a record low level in the second quarter. Even though we expect a pickup in the second half of the year, annual investment totals are still set to be around …
22nd April 2020
The latest monthly figures from MSCI confirm initial fears about the impact of COVID-19 on property. And this is only the start, figures for the coming months are likely to be worse still as the lockdown continues. As a result, we have revised down our …
17th April 2020
Social distancing measures have accelerated the shift to online spending in recent weeks. But the upside of increased online spending is limited to a few occupiers, most notably supermarkets, and is unlikely to be sustained in the longer-term. Indeed, …
9th April 2020
The rapid spread of coronavirus over the last month has dealt another body blow to UK retail. We expected the sector to see rental falls pre-COVID, but these could now be closer to 10% in 2020, leaving levels almost 20% below their mid-2018 high by the …
3rd April 2020
While COVID-19 will hit co-working hard, given the relative size of this subsector, we don’t think it will be large enough to impact rents in the overall office sector. WeWork has been gracing headlines again this past week as the co-working firm is …
2nd April 2020