1%. Newly built/refurbished stock accounted for 48% of total supply at the end of December, equating to 11.3 million sq ft. Central London investment increased by 62% in Q4 to total 5 billion. The Knight Frank Yield Guide provides a monthly update on prime yields across all commercial sectors and current market sentiment. The occupational drivers, notably hiring intentions by companies and lower unemployment figures, are positive news. Save Report Create New Alert. 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Office Industrial Retail Net balance %-100-80-60-40-20 0 20 40 60 80 Publication Market in Minutes: UK Commercial 25 November 2021 Article Contacts & Related Research Prime yields remain static in October Prime yields remained static in October; however, with four downward arrows this month, the momentum in the UK commercial property market continues to build. Although the US Federal Reserve say these are "largely reflecting transitory factors". The RICS Commercial Survey showed that occupier demand turned strongly positive in Q2. Global Real Estate Perspective May 2022. This follows a 2.3% decline in all property total returns in 2020. In this month's property snapshot, we highlight: Monthly investment volumes stable at around 4bn in November. The commercial property market could see returns grow by 6.4 per cent in 2021, real estate firm Colliers predicts. This was driven by a -2.1% fall in rental values and 27bps rise in yields. Commercial property valuations worsened further in Q1 and now look overvalued. Insights Investment . So far in 2021, more than 5.1bn has been invested in retail parks across nine European . Dimitris Vlachopoulos 15/06/2021 . Tax Add To Cart Description Providing the most comprehensive and up-to-date information and analysis of the UK Commercial Property market, including the behaviours, preferences and habits of the consumer. If you are buying an existing lease, Stamp Duty is only payable on the price paid for the lease. Commercial property prime yields Covid-19 has accelerated structural changes that were already happening. It is predominantly yield driven. Tel: +44 (0) 20 7742 4000. For surveyors, this meant including large caveats in many valuations, particularly with regard to the economic impact on . Published by CoStar in June 2021. . The growth would be made up of 4.8% income return and 1.6% capital growth. The strongest downward shift in prime yields during 2021 has been in the sectors that have seen the largest year-on-year increase in investment activity, with industrial and logistics volumes for the 11 months to the end of November being 36% higher than the full year in 2020, and retail warehouse investment volumes 40% higher. Newcastle is 2021's star performer, with take-up in the city centre hitting a record high on the back of HMRC's major 463,000 sq ft pre-let at Pilgrim's Quarter in Q4. PR Newswire (US) The following amendment (s) has (have) been made to the ' Net Asset Value at 30 September 2021 ' announcement released on 04 November 2021 at 07.00am. Find out more by downloading the full report. Capital values increased 0.8% across all UK Commercial property in June 2021, according to the latest CBRE Monthly Index. UK commercial property contains a huge variety of property types across many sectors providing selective opportunities for income investors. Over Q2 2021 capital growth was 1.8%. Commercial real estate investment volumes in the . Hear more about Mat's views in our latest podcast here. Unrelenting demand for industrial space drives rents higher and yields lower. Published by Statista Research Department , Apr 20, 2022. A New (Nominal) High. The number of deals (88) was 70% higher than a typical Q1. Connecting people & property, perfectly. RICS Q1 2021: UK Commercial Property Market Survey - Eddisons incorporating Barker Storey Matthews comments. Research May 24. Industrial real estate remains the highest conviction asset class for investors, with annualised returns of 38.2% capital growth in the 12-months to December 2021. All risks yield is important if you are investing in commercial property, as this form of yield is the amount that Chartered surveyors, property valuers and valuation professionals will utilise to showcase the risks associated with certain investments. Eighty percent of respondents expect their institution's revenues in 2022 to be slightly or significantly better than 2021 levels. Here are the key findings from Deloitte's 2022 commercial real estate outlook: Despite some financial concerns and an evolving regulatory environment, optimism around fundamentals prevails. Opens in new window. This was evident in Bristol in Q1 2021, where Aberdeen Standard Investments acquired Temple Quay House for 75 million, which reflected a yield of 3.95%. In Q1 2021, retail investment reached 1.01 billion. UK Commercial Property REIT has increased its dividend by 40% due to the improved economic outlook for the UK. Offices Flex for the future Our latest view on the outlook for the UK economy and commercial property market. These single-page publications contain succinct analysis of events, Government consultations, the Budget, and emerging themes in the property sector. prevailing low interest rates. However, performance was polarised between sectors and individual assets. Industrial Property Following a record year in 2020, there was no sign of logistics and industrial leasing momentum slowing down in the first three months of 2021. Commercial property investment volume in the UK Q1 2009-Q1 2021 and forecast for 2021. Overseas investors have remained the most active investor group in the market, accounting for 58% of investment in Q1 2021. This is the highest All Property capital growth figure since December 2017. It is a unique combination of updates from professionals on the ground and the insights of our leading research experts. October 24, 2018. Tel: +44 (0) 20 3727 1000. The group, which reported a 1.5% jump in its net asset value in the first quarter of 2021, said it will increase the quarterly dividend payable to 0.644p per share. We could see this downward trend continue over the As of the last month of 2021, the value of the commercial real estate market in the . The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. Prime yields of commercial property in the UK 2022, by property type The most important statistics Office property take-up in the UK Q4 2020 and Q2 2021, by market All-office total returns are therefore predicted to rise by 3.3 per cent in 2021, which is an upward revision to our June forecast (2.4 per cent). This has been driven by continued strength in the occupier market, which is driving record rental increases and record low vacancy. This is still 30% down on the pre-COVID quarterly . Property is generally a medium / long term investment proposition and in the UK the Covid-19 vaccine is being distributed quickly - over 3.8m people (c. 5.8% of the UK population) have already received their first dose. 200 Aldersgate. prevailing low interest rates. Fifth interim for prior period May 2021 0.531. UK Commercial Property Valuation Monitor Valuations worsen to post-GFC low. As of February 2021, retail warehouses. The commercial property market could see returns grow by 6.4 per cent in 2021. UK Property Sectors: Capital Value Growth Q2 2021 UK Property Sectors: Rental Value Growth Q2 2021 All UK Commercial Property Yields - Last 5 Years Source: MSCI, 2021 Source: MSCI, 2021 Source: MSCI, 2021 Net Initial Yield % 4.80 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 4.85 4.90 4.95 5.00 5.05 5.10 5.15 5.20 . 2%. Supporting this, EC1A 4HD. FTI Consulting. November 2021 December 2021 Savills prime yields Rising commercial property investment levels in the UK, with yields beginning to trend downwards again, the market is poised for a positive 2022. June 2021. Over the review period, large businesses accounted for 72% of gross loans obtained. JLL's regular view on real estate dynamics covering investment, offices, retail, logistics, hotels and residential property markets. Transactions reached 12.5 million sq ft, a 115% and 55% rise on Q1 last year and the 10-year average respectively. . We expect a 10% increase, compared to 2021, this year. In this latest edition of "Let's Talk Business Rates" we are focusing on the forthcoming UK Revaluation for business rates which will come into effect on 01 April 2023. . rates. UK; Find a property to buy in Europe, Africa and the Americas; Tenant fees - Non ASTS; Tenant fees - ASTS; Property market update: Q4 2020-2021. A relatively small fall in dividend yields meant that property valuations improved against equities(13). London. Higher UK property yields will continue to look attractive, with a 500bps spread between the all-property yield and 10-year UK gilts. The property portfolio outperformed its benchmark in both individual quarters and is now showing outperformance over 1, 3, 5 and 10 years. The portion from 150,001 to 5,000,000. The table below breaks down this return by sector with all valuations undertaken . The outlook for individual sectors within commercial property is diverging with asset selection increasingly important. Property Non-Catastrophic w/Good Loss History: Up 5% to 10% ( Assumes property owners experienced typical renewal increases for 2019 and 2020) CAT Property w . The UK average prime yield 3 The growth would be made up of 4.8% income return and 1.6% capital growth. Polarisation between sectors has never been more pronounced, making sector . The UK economy is projected to recover further from the pandemic over the remainder of the year. All eyes, within the global investment community, are on the inflationary pressures. Timing is everything. 3% Total UK commercial property investment volumes reached 31.4 billion at the end of July, a 32% increase on the same period in 2020 and 4% above the five-year average. Key takeaways. The yield spread between prime and average quality UK commercial property continued to narrow and is currently 84 basis points. View any properties that contain the word(s) "{0}" . Print. The biggest industrial real estate sector in the UK is currently online retail. The RICS has just published its latest quarterly UK Commercial Property Market Survey (Q1 2021), headlined, 'More respondents now sensing a recovery is underway, although conditions remain tough for offices and retail'. All office total returns will average 5.1 per cent per annum over the 2021-2025 forecast horizon. The two figures are calculated separately and added together. With consumer spending expected to drive a strong economic recovery, yet inflation on the rise and shortages in construction material, labour and goods, 2022 will be a year of growth and disruption that presents new opportunities and challenges for the UK property investments. The Group paid out dividends totalling 38.0 million (2020: 29.9 million) in the year. Commercial property offers significantly higher yields than residential, though the latter is far more popular with investors, analysis by London lettings and estate agent Benham and Reeves has found. Total returns have been 2.4% . After the strong rebound for the UK economy in 2021, growth appears to have slowed in the face of rising inflation, supply chain problems and elevated geo-political risks. SDLT rate. All retail total returns are expected to show modest growth of 2 per cent this year, having suffered . Across the UK, a net balance of +32% of respondents . The spread between property and gilt yields narrowed to its lowest level post-GFC, but still has some distance to fall to reach the lows of 2007. THE SHOW MUST GO ON 3 RETAIL PROPERTY MARKET OUTLOOK 2425 3 THE SHOW MUST GO ON 3 RETAIL PROPERTY MARKET OUTLOOK 2425 2 Less, but better floorspace. Aldersgate Street. Transactional volumes across all the commercial property sectors remained muted in January & February 2021, with the biggest impact on the overall 67% fall in activity being the quiet central London office market. info@cfnuk.com. For the year to 30th June 2021, UKCM portfolio's total return was 6.5%, significantly ahead of the benchmark return of 5.5%. The MSCI monthly index increased 7.9% over the quarter. Published by Statista Research Department , Oct 6, 2021. London, 7 April 2022 - The Green Street Commercial Property Price Index increased by 1.5% during the first quarter of 2022. The number of defaults also grew from 3.6% in 2019 to 4.6% in 2020. UK commercial property looks competitively priced on a global level, with Brexit uncertainty and retailer distress priced in. United Kingdom Research The Big Nine. June 14, 2021. Gap between the highest and lowest prime yield 400 bps 3 Number of sectors that have an upward prime yield expectation, compared to five last summer 16.7bn Q4 UK commercial investment volume. All-property equivalent yields fell by 8bps q/q in Q1 following a 3bps drop in Q4. At the all property level capital growth was 0.8% in June, 0.5% in May (compared to an increase of 0.5% . The building was let to the UK Government for 16 years. The Q3 2021 RICS UK Commercial Property Survey results show a further gradual improvement in overall market sentiment over the quarter, perhaps best . Quickly understand complex issues and their implications for the market. The hardening market trend reported in the Acturis Commercial Broking Index last year has continued into the first quarter of 2021, with commercial property owners' premiums rising 5.1% compared to Q1 2020, the largest hike across all of the commercial insurance classes https://www . This was their fastest quarterly decline since Q4 2017 (12). Timely Commentary. Investment Yield Guide - January 2021 The Knight Frank Yield Guide provides a monthly update on prime yields across all commercial sectors and current market sentiment. London Adrian Macarty, London, Buckland Estates LP, admssltd@ gmail.com - The general market has been slow throughout the Zero. UK Commercial Property Market Report 2021 Consumer Reports House and Home Professional And Office UK 995.00 Excl. Considerable but necessary short-term pain for a stable and sustainable retail market UK Commercial Property Valuation Monitor Valuations worsen to post-GFC low. Retail Property Outlook - 2021 Knight Frank's predictions for the retail market. Cushman & Wakefield MarketBeat reports analyse quarterly UK commercial property activity across office . Driven by the industrial and alternative sectors, Savills expects end-of-year investment levels to exceed the five- and ten-year averages. "Mild rental growth will result in a slight reduction in yields in the short term, but we expect yields to then generally shift out in line with the trends for the Bank . The record high levels of leasing activity in the logistics market in 2020 will drive even more investor interest in an already crowded sector, and thus put further downward pressure on yields. UK Commercial Property REIT 's results for 2021 show the company generating an NAV return of 21.5% for the year (well up on 2020's -0.9% following the effects of COVID). The regional vacancy rate has increased very slightly due to the Covid-19 pandemic, moving from 10% in 2019 to 11% as of April 2021, however, it remains extremely low in a historic context as there is an undersupply of office space within the UK's regional markets. The Q3 2021 RICS UK Commercial Property Survey results show a further gradual improvement in overall market sentiment over the quarter, perhaps best . Commercial property was one of the success stories of 2021, as investors returned to the sector in search of inflation-adjusted income and diversification. Owners or creators of commercial real estate or high quality residential real estate will continue to find high demand for assets from yield starved investors . Commercial Property Market Review December 2021 Strong performance from retail parks Retail parks remain the shining light of the retail industry, with their yields across Europe now at parity with shopping centre yields, according to Savills' data. Unfortunately, this trend is continuing into 2021. The Q1 2022 RICS UK Commercial Property Survey results point to the market gaining momentum over the quarter, with . The uncertainty in the market created by the COVID-19 pandemic and the resultant shrink in rental values made it increasingly difficult to value property both during the lockdowns and subsequently as restrictions have eased. Real Estate. Retail structural change accelerated by Covid-19 will continue to play out in 2021. While all sectors saw an improvement in Q2, the retail sector remained firmly negative (at -25%), whereas offices were closer to balance (-3%). Consequently, take-up in 2021 as a whole is expected to be circa 8.1m sq ft in 2021, rebounding by 42% on 2020 and only 12% below the annual average. &rpphufldo 3urshuw\ 6xuyh\ vxjjhvw frqglwlrqv uhpdlq srodulvhg dfurvv gl huhqw sruwlrqv ri wkh uhdo hvwdwh pdunhw :kloh douhdg\ vwurqj The fall in all-property yields was driven by declines in retail and industrial yields. The relative lack of supply supported continued rental increases in 2020, albeit the pace of growth eased, with prime rents for 50,000 sq ft units rising by an average of 4.2%, down from 6.1% in 2019. . < Publication Homepage 5 other article (s) in this publication 0 to 150,000. July 2021 August 2021 Savills prime yields July's very marginal downward shift in average prime yields picked up some pace last month coming in by 4bps to 5.09%. This was driven by Retail Warehouses (restricted) and City offices, both of which saw yields come in by 25bps. The index, which measures pricing of a broad swathe of Pan-European commercial properties, notched another new high. This has resulted in a NAV total return of 21.5% for the year and 8.7% for the fourth quarter. The Company has paid interim dividends in the year ended 31 December 2021 as follows: Payment date Rate per share (p) Fourth interim for prior period February 2021 0.460. In terms of investment volumes, the latest data for 2021 shows that c.57bn was invested in the UK last year, which is slightly above the five-year average, but a 21% increase on 2020. (See Table.) However, Our latest view on the outlook for the UK economy and commercial property market. As a whole, the average UK rental yield sits at 3.63%, so anything over that amount can be considered a high rental yield area. Encouragingly, the three-month rolling total for investment volumes reached 16.1billion for May to July 2021, a 38% increase from February - April 2021. In June, rental values increased 0.1% and total returns for the month were 1.3%.The Retail sector reported a 0.. Business Rates - Revaluation 2021. Commercial property valuations worsened further in Q1 and now look overvalued. A balance of 16% of surveyors reported a rise, up from -5% in Q 1. . . Rental growth may slow further in 2021 as new stock coming to the market eases supply pressures, but a mere moderation of growth is still . 7kh 4 5,&6 8. Rental yields can change from postcode to postcode, meaning it's important to keep researching investment locations so you can keep up with what is a good rental yield in the UK. Second-best month for residential investment since June. As part of the Perspectives for Enterprise event, discover how savvy . 7.9% growth in NAV per share to 102.0p ( 30 September 2021: 94.5p) for the fourth quarter, reflecting a 17.6% increase for the year ended 31 December 2021. View Report. How have yields moved during the Covid-19 period? The portion above 5,000,000. Across UK commercial property capital values decreased -5.0% in the last sixteen months. In 2021, there will be an end to (or at least a diminution of) Brexit-related uncertainty in the investment market.