CBRE recorded £245.5m of large-scale residential investment in Q1 2018 There remains close to £1.2bn worth of deals under offer. The volume of equity targetting the the UK's Build to Rent (BtR) sector totals £31.1bn. The number of BtR homes (complete and pipeline) has increased by 12,680 since Q4 2017. Prime investment yields are unchanged but trending weaker in zone 2 London. The largest deal of the quarter was Invesco's £86m forward funding of The Shard in Liverpool.
2018 will be crunch time for Brexit. There will be substantial political noise and turbulence throughout 2018. Although an agreement on withdrawal issues has taken time to secure, it is now not likely to have significant impact on real estate. Attention will now progress to the much more important question of future trade and migration arrangements. Trade access is likely to be no worse than the EU-Canadian deal, and no better than the EU-Swiss deal. Migration controls will be tighter than they are now, but remain extremely uncertain. In the face of the uncertainties, some businesses are preparing to move some staff to elsewhere in the EU. However, the extent of such moves is probably overstated, with the majority of threatened moves not yet implemented. Occupiers are less concerned about Brexit now than they were in late 2016. A CBRE survey of over 100 multinational firms finds that the proportion of occupiers worried about negative impacts from Brexit fell from 53% to 39% during 2017.
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.
UK commercial property capital values up 0.9% in Q1 2018 Capital values increeased 0.4% across UK commercial property in March. Rental values increased 0.2%. In Q1 2018 capital values increased 0.9% on average. Rental values increased 0.5% over the quarter. Central London rental values increased 0.4% over the last month.