Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
The past relationship suggests that the recent 10% to 50% fall in real estate equity prices provide an indication of the direction values will move in the direct market, but not the likely extent of the falls. Over the past month, real estate equity …
1st April 2020
Property has generally been at the centre of the most severe economic downturns in recent decades. But this time it is different. Although we think the commercial market is likely to experience a sharp jolt in 2020, provided the spread of the virus can be …
26th March 2020
Our latest UK economic downgrades mean that it is now inevitable that there will be a big hit to commercial property values, which we expect to fall by around 10% this year. And while conditions are different to the GFC and the shock should be short and …
20th March 2020
In recent years, industrial rental growth for Rest of South East has exceeded growth in Rest of UK. We think that this has been driven by land constraints and changing occupier demand patterns, which are unlikely to change in the near future and will keep …
16th March 2020
The suspension of business rates for many retail, leisure and hospitality firms announced in the Budget is welcome, but unlikely to provide much relief to the retail sector. Indeed, the coronavirus will drag on the economy this year and the benefits of …
13th March 2020
Coronavirus-related market trauma has not only caused a correction in equity and oil prices, but also pushed UK bond yields to new lows. This has created the potential for lower property yields, but in the current uncertainty, we still think they are …
11th March 2020
The recent market meltdown reflects concerns about the economic impact of the COVID-19 virus. This will inevitably hit commercial property, but in our view, the downside is likely to be relatively modest. The spread of the coronavirus from Asia into …
6th March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
The latest MSCI data confirmed the gloom in UK commercial property showed no signs of abating during Q4 2019. But one of the few surprises was that City offices did better than expected, mirroring a pick-up in sentiment since the election. While we don’t …
14th February 2020
A reduction in Chinese tourism as a result of the coronavirus will lead to lower spending on prime high streets, particularly in Rome, Paris and London. If tourism reduces on a global scale, the impact on spending would be greater. But so long as the …
4th February 2020
Although the share of global capital raised by European-focused funds has reduced in the last couple of years, there are indications that investors are starting to view real estate in Europe as increasingly attractive. This supports our view that demand …
20th January 2020
Against a weak outlook for both commercial property returns and the UK economy, any upside for development remains limited in 2020. After plummeting post-EU-referendum, there were signs of a stabilisation in development activity a year ago, though we …
17th January 2020
There is no denying that last year was a disappointing one for commercial property, with returns likely to be at a decade low. While we do expect some improvement this year, we believe that the outlook will remain highly uncertain as the market deals with …
10th January 2020
Following relatively weak all-property returns last year, we expect that 2020 will see an improvement as the retail downturn bottoms out later in the year. Despite this, even a positive return of around 4% will be well behind what is expected for …
9th January 2020
The election of a Conservative government with a large majority is likely to mean a slightly improved commercial property outlook. While we do not expect a post-election rebound, lower interest rates and a slightly better rental outlook will bring less …
24th December 2019
Recent mass retail fund outflows are not good news for the beleaguered UK commercial property market. In our view, this trend is not surprising given declining returns and, while we see downside to our forecasts if outflows don’t stabilise post-election, …
12th December 2019
Assuming a Brexit deal is agreed by the 31st January, the improved economic outlook is unlikely to support a rebound in commercial property investment in 2020. Indeed, we predict that a rise in yields will cause capital values to fall next year. And given …
6th December 2019
Given that employment growth has probably peaked, we expect office occupier demand to slow further over the next year or so, which will act as a drag on rental value growth. But the labour market may not be as tight as it first appears, so the risks to …
5th December 2019
With Brexit delayed and a general election ahead, all our Brexit scenarios remain on the table. However, recent developments mean that, under each scenario, we think that all-property capital values will fall by less than previously expected, but most …
5th November 2019
The financial woes of WeWork have cast doubts over its long-run future and, given the reliance of the London office market on the co-working trailblazer, on the property outlook. In our view, this is a real concern, but it is unlikely to be the hammer …
21st October 2019
We expect weak global growth to keep a lid on UK tourist flows. And with yields most likely to continue to rise, hotel capital values are likely to fall over the next few years. A weak global economy and ongoing Brexit uncertainty weighed on tourist flows …
18th October 2019
The recent stabilisation in MSCI’s monthly measure of shopping centre rental value growth appears to reflect coverage issues rather than signs that an improvement is on the way. As such, we are comfortable with our forecast that rental value growth will …
7th October 2019
There has been a dramatic expansion in the co-working office sector globally over the last five years. As these operators use a different approach to traditional landlords, this brings new risks to office markets, though we feel it is probably too soon to …
2nd October 2019
The use of retail CVAs may have peaked. However, given that CVAs lower the overall market rent and that those retailers who have been subject to a CVA are still at risk of insolvency, we think that retail rental values have further to fall. Since early …
23rd September 2019
The divergence between Central London office rental value growth and vacancy rates appears to have reflected a combination of the rising share of take-up by flexible office providers and weak landlord bargaining power. This is consistent with our forecast …
16th September 2019
With job creation driven in part by self-employed workers, the recent resilience of the labour market appears to be less positive for occupier demand. What’s more, the weakness in economic activity and falling job vacancies suggest that office-based …
11th September 2019
Measures of covenant strength suggest that retail sector and West End office tenants are most at risk of default. With only a small share of these properties under-rented, this is consistent with our expectation that yields will increase the most for …
29th August 2019
After almost a decade of ultra-low interest rates and rising real estate valuations, concerns have been voiced about the outlook for property. In our view, these worries are not completely unfounded and returns are likely to moderate, but crash fears are, …
21st August 2019
In coming years, we think that increases in retail yields will cause all-property yields to rise, irrespective of our expectations for interest rates and the economy. However, further out, if all-property yields continue to be less responsive to changes …
20th August 2019
Weakness in investment activity is likely to extend into the rest of the year. Even if a Brexit deal is secured, we think that higher interest rates and stretched valuations, along with bleak rental value prospects in the retail sector, will put a …
6th August 2019
With valuations looking stretched and the rental value outlook weak, regardless of how the pound moves in response to Brexit, we do not expect a rebound in overseas demand for property. Our three Brexit scenarios, as outlined in the latest UK Economics …
30th July 2019
The July Financial Stability Report (FSR) noted weak foreign investment and sharp outflows from open-ended property funds as two key risks for commercial property this year. In fact, estimates of the sensitivity of property fund redemptions to price …
15th July 2019
Although there has been little clarity about Brexit, under any of our scenarios – deal, no deal or repeated delays – we think the economy is well placed for growth to pick up by 2021. In turn, although timings will differ, we expect the cumulative impact …
9th July 2019
The recent slowdown in logistics vehicle traffic is consistent with the softness of industrial take-up in the first quarter. Given the supply of industrial property is expected to increase this year, without a decent improvement in logistics vehicle …
28th June 2019