CBRE UK Healthcare Investor Survey - We invited the top 50 investors to participate in a ‘State of the Nation’ survey. Tom Morgan, CBRE Head of Healthcare, considers initial findings ahead of launch in Q1 2018. Page 3 Healthcare market transaction highlights and investment volumes by sector type 2017 v 2016. Page 4 Interviews with: - Impact Healthcare REIT- Listed on the Main Market as a Specialist Fund on 7th March 2017 with the acquisition of the Minster Care Group portfolio closing on 4th May 2017. - Minster Care Group - A family-owned care home operator which has been an active participant in the UK Care Homes sector for thirty years. Pages 5-8 CBRE Healthcare team highlight market trends in the Care Homes, Primary Care, Retirement Living and Childcare/Education sectors. Page 9 Andrew Surgenor, Senior Director CBRE Healthcare, evaluates the findings recently reported by the Competition and Markets Authority in a study into the Care Homes Market. Page 10
UK property total returns reach 10.2% for 2017 so far • November’s UK property total return of 1.0% bring returns for 2017 so far to 10.2%. • Capital values increased 0.5% at the All Property level over the month, boosted by the Industrial sectors out performance. • Rental values increased 0.2% in November. Rental values fell in both the City and West End & Mid Town submarkets (-0.1% and -0.2% respectively).
Take-up for October 2017 was 0.6m sq ft, 59% below the 10-year average. The largest transaction of the month was at The Stage, EC2, where 186,000 sq ft of newly completed space was acquired. Availability increased slightly in October, standing at 14.5m sq ft, but remained 2% below the 10-year average of 14.8m sq ft. The level of under offers increased by 7% when compared with the previous month to stand at 3.5 sq ft, 25% above the 10-year average. A total of 4.8m sq ft of development and refurbishment space has completed so far in 2017, 76% of which is let. A further 1.6m sq ft is expected to complete before the end of the year.
CBRE UK Real Estate Market Outlook for 2018 In this report we look at how economic, political, and technological forces will affect property markets in 2018 and beyond. This report is the most comprehensive sector-by-sector outlook in the industry, from flexible office space to e-commerce, and from data centres to built-to-rent. There’s a comprehensive supplement on Brexit, plus a special feature on ‘proptech’. Key Takeaways: • A benign global economic environment, supported by a European recovery, though the UK is starting to fall behind. • Subdued consumer spending and business investment arising from a weak currency, inflation and Brexit uncertainty. • Risks of an overshoot in US interest rates could dampen UK growth in 2019 or 2020, though increasing clarity over Brexit will help the UK bounce back. • Rebounding strongly from the uncertainty in the immediate aftermath of the EU referendum, the UK property investment market has seen a surprise surge in transaction volumes, particularly from overseas investors. Investment volumes are likely to remain robust at around £60bn for 2018 as a whole. • We expect substantial political noise and turbulence arising from Brexit issues throughout 2018. • Although agreement on Brexit withdrawal issues has taken time to secure, these issues are not likely to have significant impact on real estate. But attention will now progress to the much more important question of future trade and migration arrangements. • EU trade access is likely to be worse than the UK has now (perhaps somewhere between the Canadian and Swiss deals with the EU), though only to the extent that migration controls are tighter than they are now. • Our sectoral picks include industrial and logistics property, especially in urban areas and the so-called ‘beds sectors’ (residential, student accommodation, hotels and healthcare).These sectors either exhibit non-cyclical characteristics, have very significant demand and supply mismatches, or (in the case of hotels) will benefit disproportionately from the weaker pound. Please feel free to contact us if you would like to discuss any aspect of the report.
The overall European hotel investment volume was up +33% y/y for Q3 2017. This contributed to a +16% y/y increase YTD 2017, with the deal volume topping €14 billion. The size of the Spanish hotel investment market more than doubled in the first three quarters of 2017, with transaction volumes increasing by +112% y/y. The United Kingdom has seen the highest actual investment volume at almost €5 billion so far in 2017. Hotel yields for key German cities continued to decrease, highlighting the strong investment appetite in the market.