Tag Archives: london
Overseas investors become largest investors in UK commercial property
Overseas investors have for the first time overtaken UK institutions to become the largest owners of UK commercial property, new data shows. The value of portfolios held by overseas owners has more than doubled, up by 129%, over the last decade to £94 billion, according to the Property Industry Alliance. The increase means that overseas investors now own almost a quarter, 24%, of all commercial property investment in the UK, the Property Data Report 2014 shows, with three quarters of this investment in London. By contrast the total owned by UK institutions fell by 16% over the decade to £75 billion, representing just under one fifth of the £385 billion invested in commercial buildings. ‘The annual Property Data Report is an invaluable resource which sets out clearly key facts about commercial property and shows the crucial role it plays in the UK’s economy,’ said Sir Robert Finch, chairman of the Property Industry Alliance. ‘Aside from its contribution to the economy, which the report shows to be sizeable, the commercial property industry is also a platform for virtually all the country’s other major industries and a significant contributor to the financing of retirement. Its attractiveness to investors from both the UK and overseas is therefore to be welcomed,’ he added. The research also reveals that average rental increases over the last 10 years in the office sector of 1.1% and 0.5% in the retail sector have increased at a much slower rate than other business costs, and well below the rate of retail price inflation of 3.3%. Drawing on recent work by the Investment Property Forum, the report highlighted that of the £683 billion total UK commercial stock, retail is the largest sector by value at £305 billion, followed by offices at £195 billion and then industrial property at £126 billion. Other commercial property, including hotels and leisure, was valued at £58 billion. Continue reading
UK property prices expected to rise 9% this year and 5% in 2015
Property prices across the UK are set to finish 2014 up by 9% and rise another 5% in 2015, according to the latest outlook report. Real estate firm Strutt & Parker expects good growth despite prices cooling and the looming general election next year in a report compiles with its retained economic advisors Volterra. But the outlook for the prime central London market is more subdued with Strutt & Parker predicting growth of 3% in 2014, and a further 2% in 2015. These forecasts are a stark contrast to 2010 and 2011 when prime central London prices surged by over 13% year on year. The firm believes that whilst improved economic foundations would certainly suggest that prices will continue to rise over the next few years, the biggest perceived uncertainty surrounding the property markets over the remainder of 2014 and 2015 will continue to be the looming election. ‘Agents are reporting a continued slowdown in some areas as buyers and sellers nervously await news on the upcoming general election and the potential for a mansion tax. This is beginning to feed through into transaction levels. As is often the case in uncertain times, it may also be that transaction levels will decrease in the run up to May 2015, but values could hold up better than expected,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Above and beyond the general election there are a number of other potential headwinds slowing the property market, including talk of interest rate changes and the Mortgage Market Review (MMR) and the slowdown it is causing,’ she explained. She pointed out that it is important to remember that the property market is all about supply and demand. ‘On the supply side, the government is continuing to boost house building across the country, and recent output figures from the construction sector reflect this. House prices tend to rise when stock is low and with more houses being built, particularly in the lower end of the housing market, this could also have an effect on UK house prices over the next few months,’ said McMahon. ‘The main driver for price market price growth in recent years has indeed been the consistent shortage of good quality housing stock in highly sought after prime locations. Any future increase of supply to the market in central London would therefore put downward pressure on prime central London house prices and we have taken this into consideration in our London predictions,’ she added. ‘In short, we expect that price growth during the remainder of 2014, and even more so in 2015, will be sensitive to prevailing political press and expectations,’ she concluded. Continue reading
Sales up over 50% year on year in prime Alpine resorts
The prime ski property market in the Alps is continuing on its upward path with sales volumes up 52% year on year, according to the latest index from Savills. More alpine sales are taking place at lower price points as the resilience of the ultra-prime markets starts to ripple down the market ladder, according to the report. ‘A year ago we predicted prolonged periods of sunshine and blue skies for the Alpine property market. This may have been a somewhat easy prediction, given a recovering world economy, increased confidence and job security and in the case of UK buyers, a steady strengthening of sterling,’ said Jeremy Rollason, managing director, Alpine Homes. ‘The Alpine property market however continues its upwards trajectory in terms of increasing sales volumes, up 52% year on year, although this does not necessarily mean rising prices,’ he explained. ‘While buyers are more prolific for the above reasons, prices in the Alps have not generally kept pace with house price increases back in the UK, particularly in London,’ he added. The index report points out that Switzerland’s position outside the European Union cements is appeal as a safe haven for wealth and as such resorts carry a price premium. In the case of Verbier, values can reach €22,400 per square meter or 80% more than the average. It’s therefore no surprise that five Swiss resorts, Gstaad, St Moritz, Zermatt, Verbier and Crans Montana, appear in the Savills Top 10 Ultra-Prime Resorts Index. The family friendly resort of Saas Fee stands out as offering a long season with good quality snow but with comparatively lower priced property at averages of between €4,000 and €8,000 per square meter. ‘Verbier and The Four Valleys remains ever popular and is the destination of choice for many international buyers. Supply restrictions with the new Lex Weber law limiting the number of second homes to no more than 20% of the total will begin to bite in the next one to two years, once existing supply is absorbed. Upwards price pressure in the leading Swiss resorts is inevitable, although there are still deals in the resale market for those that shop around,’ he added. Austria’s comparative affordability, dual seasonality, diverse culture and attractive rental returns make it the country of choice for those chasing bang for their buck. Indeed, rental returns of ski property in Austria are roughly double those of either France or Switzerland, at circa 5% to 7% gross. Kitzbuhel is the only Austrian resort included in the Savills Top 10 Ultra Prime Resorts Index where prices range from €8,000 per square meter to €15,000 per square meter. For buyers seeking value, Bad Gastein and Zell am See offer lower priced property and average ski conditions, although the latter boasts a particularly strong summer season. The resort of Ischgl, the Ibiza of the Alps, is highlighted as one to watch. Prices here are under €4,000 per square meter. Stability is… Continue reading
