IN_Business is our highly popular view of key trends in the national office and industrial markets. In this twice-yearly magazine we hear from CBRE's National Team experts on some of the hottest trends for UK real estate in 2014. Read here
In this special London supplement, CBRE’s sector experts describe the remarkable property renaissance gripping the capital. London’s prime residential, shopping, leisure and hospitality markets are all booming. Read here
ACCELERATING CAPITAL VALUE GROWTH ACROSS THE UK According to the latest CBRE Monthly Index, total returns for All Property were 2.1% in June. Capital values increased by 1.6% over the month. Central London offices outperformed again, with a total return of 2.4%, driven by strong growth in June of 2.1%. Outside of Central London, capital values also continued to increase, however at a slower rate than in the previous month. The biggest contributor to the strong retail performance was shopping centres, which recorded 2.9% capital value growth. Capital values for high street shops and retail warehouses increased by 1.1% and 1.5% over the month.
We are delighted to release the second edition of IN_business where experts from the CBRE National team will guide you through some of the hottest trends for UK real estate in 2014. A major focus of this edition is the growing role of international investors in the UK market. As the economic recovery spreads to the regions, overseas capital is no longer just targeting the safe haven of London offices. We hear from CBRE’s National team who discuss this increase in foreign buyers who have been responsible for more than a third of the money flowing into UK regional property in the last three years. This issue also examines the independence debate in Scotland, explores the market for energy from waste and takes a visit to Airport City in Manchester and Abstract Securities' vision of the 'Austerity Office'.
YIELD IMPACT DRIVING THE PERFORMANCE IN THE REST OF UK UK commercial property recorded yet another strong overall performance in May. Total returns for All Property were 1.8% in May and 6.8% over the year to date. Capital values increased by 1.3% over the month and to the end of May this year capital values have recorded growth of 4.1%. Total returns for All Offices were 1.9% in May, with capital values increasing by 1.4% over the month. In the Rest of UK, yield shift is by far the biggest contributor to capital value growth, with increasing rental values playing only a small part. In contrast, rental value growth in London and the South East is making an increasing contribution. The Retail sector continues to improve, recording a total return and capital value growth of 1.7% and 1.2% respectively. Although capital values are increasing, rental values continued to fall in May.
Take-up in Central London in May 2014 was 1.38m sq ft, an increase of 57% on the previous month. Central London availability fell marginally in May, standing at 13.70m sq ft, 16% below the 10-year average. The level of under offers in Central London dropped by 17%, but remains a third above-trend at 3.61m sq ft. The largest deal of the month saw the Japanese bank Mizuho acquire 195,300 sq ft at Two New Ludgate, EC4