Tag Archives: asia
Demand remains strong in all commercial property sectors in UK
Commercial property prices in the UK continue to rise as demand remains strong in all sectors according to the latest survey from the Royal Institution of Chartered Surveyors (RICS). UK Commercial Property is still seen as a safe haven for investors with rents and capital values set to continue rising despite macro concerns, the survey says. With businesses across the UK thriving and employment data still strong, the industrial sector has the greatest momentum in occupier demand. Some 43% more chartered surveyors are seeing a rise in demand for industrial space in the fourth quarter of 2015, compared to 29% more seeing a rise rather than fall in demand for offices and 26% more seeing a rise in demand for retail. As demand increases, supply has continued to decrease across the UK with the survey recording the eleventh consecutive quarterly drop in available space across the commercial property market. The survey report also says that development nationally has only increased marginally with anecdotal evidence suggesting that there is a lack of commercial construction activity in many locations. It also explains that a deepening skills crisis is playing a key role in inhibiting development. One notable exception to the low level of new build across the UK is in the London office sector, where development has risen sharply over the last three quarters and 34% more surveyors saw a rise rather than fall in office development starts in the quarter. In the face of continued demand and lack of supply, rent expectations for the next quarter are strongly positive across all sectors with 35% more chartered surveyors projecting a rise in rents across all sectors. Industrial space was again the strongest performer with 43% more surveyors envisaging a further rise rather than fall in rents. Looking at the investment market, buyer enquiries have risen in each sector albeit less than previously and the upward trend in foreign buyers has noticeably flattened. Notwithstanding this, capital values are forecast to rise further in all sectors of the market in both the near and longer term with prime office and industrial sectors most likely to outperform. Looking further forward, all sector rents are set to continue to rise both in the medium and longer term. Over the next 12 months, respondents are most confident of seeing rental increases in the prime industrial market with 87% more respondents foreseeing a rise as opposed to a fall. At the other end of the scale, secondary retail space exhibits the most modest reading on a sectoral comparison, but still posted a relatively healthy balance of +51% expecting rents to grow. Regionally price expectations are positive across the UK, with the strongest performers expected to be London and the East, however, 81% of respondents in the capital now view commercial real estate in central London to be overpriced, slightly up on the 77% who took this view in the third quarter survey. The report also points out that there… Continue reading
US residential rents set to slowdown in 2016
Residential rent growth in the United States is expected to level off over the next 12 months, slowing to an annual rate of 1.1% by December 2016. The average at the end of 2016 is projected to be $1,396 compared to $1,381 in December 2015, according to the latest rent forecast from real estate data firm Zillow. The firm is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest growing metros had double digit annual rental appreciation at the end of 2015 and Zillow expects rental appreciation to slow down most significantly in Nashville, San Francisco, Portland and Denver. Rents in San Francisco saw a 12.5% rise in 2015 and the Zillow forecast is for growth in San Francisco to be 5.9% in 2016, half as fast as in 2015. Even with the slowdown, rents will remain unaffordable in many of the major markets across the US, especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40% of their income on a rental payments. ‘Hot markets are still going to be hot in 2016, but rents won't rise as quickly as they have been. The slowdown in rental appreciation will provide some relief for renters who've been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground and rents are still rising and renters are struggling to keep up,’ said Zillow chief economist Dr. Svenja Gudell. She pointed out that the slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets. Continue reading
Modest house price growth expected in UK in first months of 2016
UK house prices increased by 0.3% in January and annual growth is broadly stable at 4.4%, according to the latest residential index to be published. This takes the average price to £196,829 but the monthly rate of increase slowed from 0.8% in December which was unseasonally high, the report from the Nationwide Building Society says. Robert Gardner, Nationwide's chief economist, pointed out that annual house price growth has remained in a fairly narrow range between 3% and 5% since the summer of 2015. This annual trend was maintained in January, with house prices up 4.4% over the year, broadly in line with the 4.5% increase recorded in December. ‘As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level. The labour market appears to have significant forward momentum,’ said Gardner. ‘Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation adjusted terms regular wages continue to rise at a healthy pace,’ he added. He also pointed out that this trend expected to continue and with interest rates also likely to stay on hold for longer than previously anticipated, the demand for homes is likely to strengthen in the months ahead. ‘The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability. Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows,’ Gardner added. Continue reading
