Uk
UK regional office market sees demand increase
Occupier demand in the UK regional office market increased 51% in the first quarter of 2015 compared with the previous quarter, with total investment at its highest level since 2007. This growth totalled a combined take up of 2.08million square feet and 49% above the five year quarterly average, according to the latest data from real estate firm Knight Frank. Birmingham saw the top performance in the second quarter with take up of 521,136 square feet which was boosted by a number of large transactions, the most significant being the 212,000 square feet pre-let to HSBC at Arena Central. Pre-letting activity also increased in the second quarter of the year, impacting on new and grade A availability which is down by 17% year on year collectively to 2.2 million square feet. In the investment market some £2.09 billion of regional office assets changed hands in the first half of 2015, the sector’s strongest first half year since the second half of 2007. Bristol, Manchester and Birmingham were the main focus of investment activity, accounting for over half of total investment turnover. Bristol in particular saw some sizeable transactions, including the off market purchase of Templeback by Orchard Street Investment Management in June 2015 for £58.5 million, reflecting a net initial yield of 5.34% and Aviva Investors’ acquisition of 66 Queen Square for £32.7 million, at a net initial yield of 4.94%. ‘Improved occupier confidence has led to a surge in pre-letting activity and high levels of take-up across the main regional office markets in the second quarter,’ said Stephen Hodgson, head of regional offices at Knight Frank. The firm anticipates that this will be reflected in rental growth and further starts on new development schemes over the next 18 months. ‘On the investment front, despite the fact that yields are approaching historic lows we also feel that there is scope for further yield compression,’ added Hodgson. Continue reading
US housing values drop for first time in almost four years
The housing market in the United States is slowing down, with home values falling month on month for the first time in almost four years, according to the latest index data. Prices fell 0.1% in July compared to the previous month and year on year growth was 3%, down from 3.4% in June, the Zillow real estate market report shows. The report says that nationally home value appreciation is levelling off after its rapid pace in the early years of the recovery. Of the 517 metros covered by the Zillow index, 204 saw a slowdown, including major metros like Washington, DC and Cincinnati. Zillow says that the slowing appreciation is a sign that the market is returning to normal and economists have expected to see growth flattening out as the recovery continues. Even strong markets like Denver, Dallas, San Jose and San Francisco, which had double digit annual home value growth in July, saw their monthly appreciation rates ease compared with June. ‘This slight dip in home values is a sign of the times. Many people didn't think it was happening, but it is. We've been expecting to see a monthly decline as markets return to normal,’ said Zillow chief economist Svenja Gudell. ‘However, this is not like the bubble bust. We're not going to see 10% declines. The market is levelling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure,’ Gudell added. She explained that slowing home values could provide more opportunities for hopeful buyers who have been waiting on the side lines for the market to cool off. ‘More homes may be coming online as home owners who have been watching strong home value growth decide to list their houses as appreciation slows and smaller gains are expected. This could help ease the constrained inventory the market has been facing for the past several months,’ she pointed out. Meanwhile, the index also shows that residential rents continue to grow at a rapid pace, up 4.2% from last July to $1,376. With no sign of rents slowing down and the potential for more homes for sale, conditions may be right for buyers to enter the market, the firm suggests. Continue reading
Research paints a generally harmonious tenant/landlord relationship
Tenants in the UK believe that landlords are fair and helpful but there’s room for improvement on safety issues according to new research. Overall a harmonious, friendly and respectful relationship exists between landlords and tenants, with 59% of people surveyed saying they believe they pay a fair price in rent and 48% saying they have a good or very good relationship with their landlord. The research from AXA Business Insurance also shows that only 6% of tenants feel their relationship with their landlord is bad or very bad, and good will and acts of kindness are common between property owners and the people who rent from them. But it also highlights significant room for improvement when it comes to safety and security. Some 43% of landlords have failed to arrange the legally required annual gas safety check, 54% have neglected to install a fire alarm, 68% have not organised an annual electrical safety inspection, and 71% have not organised a carbon monoxide alarm. In addition, 74% of landlords have failed to put locks on all external windows and doors and 78% of landlords have not arranged a door chain or spyhole to keep their tenants secure. Despite these important oversights, people up and down the country generally paint a positive portrait of the person who owns their rented home. Some 30% of tenants most commonly describe their landlords, 23% as helpful, 20% as responsible, 19% as trustworthy and 15% as caring. In the small number of cases where the relationship is more difficult, some 2% of tenants say their landlord is creepy, 3% think they’re seedy and 3% describe them as dishonest. Some 28% of tenants say their landlord has done something ‘nice’ for them and 20% say they have done something ‘nice’ for their landlord in return. Many swap cards on special occasions, while the most common acts of kindness on the landlord’s side include gift giving, forgiving a late payment in difficult times and offering help above and beyond what might be reasonably expected in a tenant’s agreement. In return, tenants are happy to arrange small decorating or DIY jobs and even do a bit of home baking when they expect a landlord visit. And while 35% of tenants admit they’d take more care of a home they owned themselves, most make a special effort to look after the property and aim to have it clean and tidy before the landlord pops round. Cleaning floors and bathrooms, making beds, spraying air-freshener or lighting candles and taking the bins out in advance of a visit are common. Yet even those people who enjoy a positive rental experience recognise that not everyone is as lucky, and 85% agree that the government should do more to protect people who rent from private landlords. ‘There’s clearly a lot of good will between landlords and their tenants and our research shows that rental home horror stories and negative stereotypes… Continue reading
