{"id":9757,"date":"2022-12-01T09:16:23","date_gmt":"2022-12-01T09:16:23","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/12\/01\/commercial-property-market-review-november-2022\/"},"modified":"2022-12-01T11:47:35","modified_gmt":"2022-12-01T11:47:35","slug":"commercial-property-market-review-november-2022","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/12\/01\/commercial-property-market-review-november-2022\/","title":{"rendered":"Commercial Property Market Review – November 2022"},"content":{"rendered":"
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Weakening outlook for commercial property<\/strong><\/p>\n<\/div>\n\n

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The Q3 2022 RICS UK Commercial Property Survey reveals a\npicture of weakening market activity, with 81% of respondents now considering\nthe market to be in downturn.<\/strong><\/p>\n<\/div>\n\n

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Headline expectations for rents and capital values were in\nnegative territory in Q3. Prime office rents are expected to remain broadly\nflat in the year ahead, as opposed to a previously expected increase expected.\nMeanwhile, the outlook for the secondary office sector is more negative, with a\nnet balance of -42% of respondents expecting a decline in rents (down from a\nreading of -26% in Q2).<\/p>\n<\/div>\n\n

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Twelve-month rental expectations are still positive for the\nindustrial sector, while the degree to which rents are envisaged rising is the\nmost modest since the early stages of the pandemic.<\/p>\n<\/div>\n\n

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Looking ahead, the prospect of further interest rate rises continues\nto weigh heavily on the outlook for the next 12 months. \u2018The full extent is\nnot currently known\u2019<\/em> commented one respondent.<\/p>\n<\/div>\n\n

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Prime yields rise in stormy quarter<\/strong><\/p>\n<\/div>\n\n

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All-property average prime rents rose by 1.5% in Q3 2022,\naccording to CBRE\u2019s latest quarterly Prime Rent and Yield Monitor.<\/strong><\/p>\n<\/div>\n\n

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Yields moved up 41 basis points, following a turbulent\nquarter that included the market turmoil brought about by September\u2019s \u2018mini budget\u2019.\nThe latest Market in Minutes report from Savills also showed yields rising\nacross the board, as commercial markets reprice at speed. The report observes\nthat, \u2018price discovery is happening more quickly than we have ever seen\nbefore in a falling market\u2019.<\/em><\/p>\n<\/div>\n\n

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Savills remain optimistic about the outlook for the office\nand logistics occupational markets, noting that these sectors proved their\nresilience during the turbulent pandemic years, even delivering record prime\nrent levels in some cases. The same factors that drove this resilience \u2013 an\nundersupply of prime space and a contracting development pipeline \u2013 remain in\nplace, it points out.<\/p>\n<\/div>\n\n

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Less positively, weakening confidence and rising construction\nprices are leading to fewer-than-expected refurbishment and development starts\nthis year, Savills stated. Indeed, 43% of planned London office completions\nhave not yet started on site.<\/p>\n<\/div>\n\n

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Strong take-up in big shed market<\/strong><\/p>\n<\/div>\n\n

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The industrial sector remains resilient, according to Avison\nYoung\u2019s Big Box Bulletin Q3 2022, with strong market fundamentals holding firm\nin trying economic conditions.<\/strong><\/p>\n<\/div>\n\n

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Take-up in Q3 totalled 14.8m sq. ft \u2013 47.8% above the\nfive-year quarterly average. Analysts expect demand to stay strong, moreover,\nespecially \u2018best-in-class\u2019 buildings with strong environmental credentials.<\/p>\n<\/div>\n\n

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Year-to-date take-up still lags the record-breaking\nperformance of 2021, which, analysts say, is the result of an undersupplied\nmarket. Indeed, availability of grade A space is currently 24m sq.ft, equivalent\nto only two months\u2019 worth of supply based on recent demand.<\/p>\n<\/div>\n\n

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Key Q3 occupiers included SeAH Wind Ltd (1,130,000 sq. ft),\nRhenus Logistics (981,042 sq. ft) and Maersk (601,761 sq. ft). Q3 take-up was\ndominated by speculative (44%) and design & build (41%), with existing\nbuildings contributing 15%.<\/p>\n<\/div>\n\n

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Regionally, the East Midlands (30.7%) led the way, ahead of Yorkshire and North East England (23.4%) and North West England (13.4%).<\/p>\n<\/div>\n\n

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It is important to take professional advice before making any\ndecision relating to your personal finances. Information within this document\nis based on our current understanding and can be subject to change without\nnotice and the accuracy and completeness of the information cannot be\nguaranteed. It does not provide individual tailored investment advice and is\nfor guidance only. Some rules may vary in different parts of the UK. We cannot\nassume legal liability for any errors or omissions it might contain. Levels and\nbases of, and reliefs from, taxation are those currently applying or proposed\nand are subject to change; their value depends on the individual circumstances\nof the investor. No part of this document may be reproduced in any manner\nwithout prior permission.<\/em><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Weakening outlook for commercial property The Q3 2022 RICS UK Commercial Property Survey reveals a picture of weakening market activity, with 81% of respondents now considering the market to be in downturn. Headline expectations for rents and capital values were in negative territory in Q3. Prime office rents are expected to remain broadly flat in […]<\/p>\n","protected":false},"author":12,"featured_media":9760,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,36],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/9757"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=9757"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/9757\/revisions"}],"predecessor-version":[{"id":9778,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/9757\/revisions\/9778"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/9760"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=9757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=9757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=9757"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=9757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}