Uk
Number of rural estates sold in Scotland doubled in 2015
Despite challenges facing the rural property sector in Scotland, including political and economic uncertainty, more than double the number of rural estates sold this year compared with 2014. Research from real estate firm Savills reveals quality and diversity of field sport and conservation were the main drivers for purchase in 2015, with viewers coming from the length and breadth of the UK, the Middle East, the US, Belgium, Sweden and the Netherlands. ‘The estate market has shown a significant increase in activity this year, despite the publication of the draft Land Reform Bill in June,’ said Evelyn Channing, a Director in Savills Edinburgh office specialising in the sale of rural estates. The figures show that so far this year, some 20 estates totalling 118,000 acres have sold or are under offer at an accumulative asking price of £63 million, more than double the number sold in 2014 but equivalent to 2013. ‘Almost a third of the estates sold this year were launched prior to 2015. Last year’s referendum resulted in a quieter market in 2014 and deterred many potential sellers from coming to the market,’ explained Channing. ‘Savills has handled over a third of the estates sold on the open market this year. Around 50% of our buyers have been British, in contrast to the past few years when the majority of purchasers were from overseas,’ she added. The research also suggests that in the current climate, buyers appear to be taking comfort in being in competition with others on the open market. Savills estimates that only 15% of sales in 2015 were conducted privately, considerably less than in previous years. ‘No market thrives on uncertainty, and there was a sense of trepidation from buyers, sellers and indeed selling agents at the start of the year, with minds being focused on the ‘what if’s’ of Land Reform,’ Channing pointed out. ‘However, the way ahead has become significantly clearer in recent months and we are anticipating the return of confidence in the estate market in Scotland will lead to further increased activity in 2016,’ she concluded. Continue reading
Spanish home prices up 4.5% year on year in third quarter of 2015, rents also up
Residential property prices increased by 4.5% in the third quarter of 2015 compared to the same period in 2014, according to the latest data from the National Statistics Institute. The details from the housing price index means that prices have now increased for six quarters annually in a row following six years of decline and it is the highest quarterly rise since the last quarter of 2007 when growth was 5.7%, just before the global economic downturn. House prices then started falling in the second quarter of 2008 with a decline of 0.3% and continued to fall until the second quarter of 2014. A breakdown of the figures show that the price of new homes fell by 4.3% and other homes were up by 4.5% while quarter on quarter prices overall increased 0.7% which followed a strong rise of 4.1% in the second quarter of the year. In what is a sign of the universal nature of the recovery in the Spanish property market the figures show a rise in prices in almost every region in the country. Asturias and Extremadura recorded the greatest annual rates of increase, up by 2.6% and 2.4%, to 3.5% and 3.3%, respectively, while the greatest annual fall was in the Basque Country and Valencia, down by 0.9% and 0.6% to 1% and 2.1%, respectively. Quarter on quarter nine regions saw prices rise, seven recorded declines and prices remained stable in the Basque Country. The largest quarterly increase was in the Balearic Islands with growth of 3.1% and Asturias up 1.8%, while the biggest fall was in Navarra with a decline of 1.1% and Aragón down 1%. Residential rents are also rising and increased year on year in all regions in November, the first time this has happened for eight years. The data from property porta Fotocasa shows this was led by Catalonia with an annual rise of 10.6%, followed by the Balearic Islands up 7.8%, Madrid up 6.3% and La Rioja up 6%. In Castilla-La Mancha average rents increased by 0.7%, Cantabria was up 1%, the Basque Country up 1.1% and Navarra up 1.3%. Month on month rents increased by 0.5% to €7.02 per square meter per month with 11 regions seeing rises. The Balearic Islands saw a monthly rise of 1.9% and Catalonia up 1.3% while La Rioja, the Canary Islands and Cantabria all saw growth of 0.6%. But average rental prices fell by 1.2% month on month in Galicia, fell by 0.9% in the Basque Country and by 0.8% in Murcia. The data also shows that since the peak of the market in May 2007 when rents were €10.12 per square meter per month rental values have fallen by 30.7% and five regions have seen accumulated declines over 30%. The steepest decline since peak has been in Aragón where rental prices have fallen by 41.6%, followed by Cantabria down 36.1%, Castilla-La Mancha down 35.2%, Valencia down 34.5% and Murcia down 32.3%. The smallest declines from peak are in Castilla… Continue reading
2016 set to see continued record investment in UK commercial property markets
The next 12 months is set to be another year of strong returns for investors in the UK’s commercial property sector with investment volumes expected to be as strong as 2015 which was a record year. The latest forecast from global real estate advisor CBRE suggests that total investment in UK commercial property will be around £70 billion in 2016 and the firm predicts attractive total returns of around 10.1%, declining thereafter but remaining positive through to 2020. The report explains that as capital value growth slows, income will become the most important driver of returns. A strong economy and an increasing role in e-commerce suggests that the industrial property market will outperform with total returns of 9.5% pa on average for each of the next five years. Retail property is expected to experience happier times as consumer disposable incomes recover, with returns of 7.0%, while recovering supply in the office market will constrain total returns to 7.4% on average each year to 2020. It also points out that foreign investment has long been one of the main drivers of the central London market and while this rose further in 2012/2013 it levelled out at around 70% of all central London investment in 2014/2015. In contrast, foreign investment has not historically been a significant part of the UK market outside central London, making up only around 20% of acquisitions. However, in recent years foreign investment outside London has increased. Indeed, in 2015 so far some 32% of transactions by value outside London have attracted foreign buyers from 31 different countries, a noticeable increase in the diversity of investors. Looking ahead the firm says that the origins of foreign capital will also change. Asian investment inflows have been higher than the 10 year average, with countries like Singapore and Taiwan becoming more important. Meanwhile, European and US investors have withdrawn a little over the last year, potentially due to a recovery in Europe promising relatively better value than the UK. Increasingly, Middle East investment is coming from private wealth rather than sovereign wealth, given the latter is suffering from the low oil price. ‘After several years of strong investment and capital growth, 2016 will offer steadier and more sustainable returns for the commercial property market. The UK economy remains strong, underpinning the rental value growth which will form a much more important part of investor returns than in the last few years,’ said Miles Gibson, head of UK research at CBRE UK. ‘Overseas investment will remain strong and increasingly diversified as London maintains its status as the global centre for property investment. But we predict increasing interest in, and outperformance by, office and industrial property markets in the wider South East and other big UK cities, and a long-awaited recovery in retail,’ he added. According to Ciaran Bird, UK managing director of CBRE UK, property will continue to be a bellwether for the UK economy… Continue reading
