• CBRE’s 2017 Outlook report provides a comprehensive overview of the key trends affecting UK property markets in 2017. Alongside core sections covering the economic, political and investment outlook there is coverage of every major investment and occupier sector. • There is an improved global economic outlook, but inflation is now a more significant risk than previously. There is less concern about emerging markets. • UK GDP growth is expected to slow to 1.4% in 2017 due mainly to Brexit-related uncertainty and a tighter labour market. • The Brexit process will mean a very uncertain 2017, with some volatility in markets expected even if the underlying economy is performing well – not least when Article 50 is served. • 2016 investment volumes likely to be 30% down on a very strong 2015, with 2017 slightly weaker than 2016.
Industrial property sparkles as commercial property ends 2016 on a high note Capital value growth for All Property in December 2016 was 0.6% which fed into total returns of 1.1%. All Offices capital values increased by 0.5% in December, driven by Outer London/M25 and Rest of UK offices. All Property rental values rose by 0.2% over the last month. The annual total return for UK commercial property in 2016 was 2.7%.
After a turbulent summer in the aftermath of the referendum, all indications so far are that the UK’s student accommodation sector is proving resilient to Brexit. CBRE Student Accommodation Valuation Index of 48,000 bedspaces shows total return of 10.16%. Buoyant investment market, dominated by well-funded overseas investors, owner operators and private equity. Our league table shows a year on year increase of around 26,000 bedspaces (12%), which indicates a significant step up in supply across the UK. Student accommodation continues to be the most popular ‘alternative’ property asset class with lenders.
UK prime commercial property rental values grow 0.6% in Q3 Rental values for UK prime commercial property grew by 0.6% in Q3 2016. 7% of CBRE monitored locations recorded increasing rents, while 1% recorded decreasing rental values. Prime yields for All Property both remained relatively flat despite the uncertainty following the EU Referendum result, at 5.5% in Q3.
Take-up in Central London for November 2016 was 1m sq ft, on par with the 10-year average. This represents an increase of 118% on the previous month. Availability increased by 4% over the course of the month to stand at 14.2m sq ft. Despite the increase availability remained below the 10-year average of 14.6m sq ft. Central London under offers fell by 12% to 2.9m sq ft in November but remained marginally above the 10-year average of 2.8m sq ft. The largest deal of the month saw Fidelity acquire 105,800 sq ft at 4 Cannon Street, EC4, one of six deals over 50,000 sq ft in November.