BCSC is the UK's largest business to business networking property event bringing together the best from all spectrums of the retail and retail property sectors.
Whatever your role in the retail and retail property world we look forward to meeting you at BCSC 2016. With over 50 members of the CBRE team at the conference we will have expertise from all areas of the property world.
If you are at BCSC on 14-15th September come and meet the team on Stand 07. For a full list of our delegates attending the conference, please click here.
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• CBRE’s 2017 Outlook report provides a comprehensive overview of the key trends affecting UK property markets in 2017. Alongside core sections covering the economic, political and investment outlook there is coverage of every major investment and occupier sector.
• There is an improved global economic outlook, but inflation is now a more significant risk than previously. There is less concern about emerging markets.
• UK GDP growth is expected to slow to 1.4% in 2017 due mainly to Brexit-related uncertainty and a tighter labour market.
• The Brexit process will mean a very uncertain 2017, with some volatility in markets expected even if the underlying economy is performing well – not least when Article 50 is served.
• 2016 investment volumes likely to be 30% down on a very strong 2015, with 2017 slightly weaker than 2016.
•Millennials still enjoy physical retail, primarily as a social activity but also for the instant gratification it provides
•Retailers are investing in experiential factors to differentiate their offering from e-retail
•E-commerce sales are growing, but millennials use online services to research purchases, increasingly making them savvy and more powerful consumers
•E-commerce is seeing the greatest growth within Europe
•Despite attempts by retailers, millennials much prefer to have their deliveries sent to the home. This increasingly looks less viable due to the growing expectations and costs associated with this delivery option
•Logistical providers are having to trade off between the economies of scale associated with more rural large warehouses and speed of delivery within city hubs
Expect a year of political uncertainty and the challenge of rising interest rates in Europe in 2017
Politics aside, however, the gradual tightening of some occupier markets seen in 2016 will continue in 2017, especially for better properties in the better locations
Despite a gradual turnaround in the long-term interest rate trend, there is still scope for further yield compression in prime assets as rental growth and low interest rates by historical standards continues to make property look attractive
2018 or 2019, rather than 2017 are likely to be the years when the yield cycle starts to turn
From a real estate perspective, global gateway cities offer many benefits. Their attractiveness to people and businesses means that space demand in their commercial real estate markets increases steadily over the long term, underpinning rent growth. These cities are also highly liquid markets, where real estate investments can be readily bought and sold. We have compiled this new report so that those looking to invest in one or more of the world’s great cities can quickly and easily understand pricing and market conditions.
•BOTH PRIME HIGH STREET AND SHOPPING CENTRES SEE POSITIVE BUT SLOWING RENTAL GROWTH IN Q3
The CBRE Prime High Street rent index grew by 1.0% q-o-q and 7.0% y-o-y. There has been a consistent slowing of the rental index since Q2 2015. The EMEA Shopping Centre index, has returned to growth in Q3, as the index grew 0.2% q-o-q and 2.1% y-o-y up on the quarterly decline in Q2 but slightly slower than Q2’s year on year growth rate of 2.3%.
•CONSUMER CONFIDENCE IN EUROPE SLUMPED AFTER BREXIT, BUT RESPONDED WELL IN THE LAST MONTH OF THE QUARTER
Consumer confidence in the European Union dropped significantly after the United Kingdom’s E.U referendum, with the consumer confidence index falling 1.9 pts in July, however there was a significant improvement in confidence in the last month of the quarter but the index still remains below Q2 figures.
•EUROPEAN RETAIL INVESTMENT TOTALLED €13 BILLION IN Q3
Germany has overtaken the UK as the largest target market for European retail investment in Q3. Investors are continuing to demand core retail assets despite the meagre returns on offer in prime retail markets, however these asset represent a decent premium relative to the bond market.
As we move towards the busy 4th quarter trading period, this report highlights some of the major trends seen in European commercial property markets so far in 2016. The big event in the political sphere was undoubtedly the surprise result in the UK referendum but excluding the UK, the demand for real estate in Europe has remained strong.
Of the 35 largest non-UK office markets in Europe, prime office yields have continued to fall in 22 of them so far in 2016 with yields remaining stable. The pattern of office leasing across the European markets continues to reflect the economic situation: positive but slow growth with some marked differences from place to place reflecting offsets in the timing of cycles; all tempered with a degree of caution from the lead-up to, and result of, the EU referendum in the UK.
The increased attraction of prime property is linked to the policy adopted by the ECB over the past two years. We now have negative short-term policy rates and very low long-term government bond yields. This has pushed investors towards alternative “near bond-like” assets which offer some characteristics of fixed income and security. Prime property goes some way to fitting the description and steadily rising rents and falling vacancy have helped to make the case.
The majority of retail markets across Europe have seen positive retail sales volume growth so far in 2016 and the EU average growth rate has been a healthy 3.2% .
The industrial & logistics markets have also performed well so far in 2016 even in the UK, where logistics occupier demand was surprisingly strong amidst a general referendum-linked slowdown.
Although uncertainty around the impact of the referendum will weigh on parts of the UK market, continuing economic growth and an ongoing very low interest rate environment will continue to drive real occupier and investor demand over the rest of 2016 and into 2017 despite the plethora of elections and referenda still to come.