Q2 has surpassed expectations, with more than £800m of capital committed by mid-June and more than £250m worth of deals expected to close by the end of the quarter Activity is spread far and wide with deals in Edinburgh, Reading, Milton Keynes, Southampton demonstrating the strength of investor interest across the UK. Yields continue to strengthen in regional markets outside the top cities Joint ventures, platforms and access to land will remain a key theme going forward with the current marketing of Quintain’s Wembley Park business, USS and Places for People revealing their JV and Ballymore making a positive announcement to use Build to Rent as a sales exit for a proportion its London pipeline. The property press has also reported that British Land is considering acquiring an interest in Fizzy Living.
More mainstream than Mainstream Squeezed returns and over supply of traditional assets are prompting investors to look straight beyond conventional real estate to alternative opportunities. With the option to enhance returns through direct or indirect operational involvement, Alternatives are fast becoming the new Mainstream. We show how Alternatives have displaced the Mainstream in offering investors capital and income returns traditionally associated with commercial real estate, and how investors can boost these through direct or indirect operational involvement.
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.
Contents: Despite a falling number of pubs nationwide, pub industry revenues have risen by almost 4% in the past two years. Read more page 3 Tenanted pubs: Hawthorn Leisure has been sold to NewRiver REIT for £106.8m. Read more page 4 Managed pubs: Spring trends in lfl sales and the impact of continued rise in capacity in the casual dining space. Read more page 4 Market activity highlights and like-for-like sales in managed pub and restaurant operators. Read more page 5 CVAs can be an essential last chance saloon to saving jobs, brands and a degree of income for investors. Read more page 6 Football's coming home - Millions of fans are forecast to watch the World Cup at the pub and to drink 14 million extra pints providing a £42m boost to the UK economy. Read more page 7
Take-up increased by 74% to 1.3m sq ft in May, ahead of the 10-year average of 1m sq ft. The largest transaction of the month was an owner occupier deal which saw the Chinese Embassy acquire 520,000 sq ft of office space at Royal Mint Court, EC3. Availability in Central London was largely unchanged in May, standing at 14.4m sq ft, remaining below the 10-year average of 14.9m sq ft. Under offers increased by 9% in May to 4.2m sq ft, a 33-month high.