United Kingdom Real Estate Report

Published 18 August 2015

  • 99 pages
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$1,295.00
United Kingdom Real Estate Report

BMI View : Low commodity prices and inflation CPI of 0.0% in Q215 should sustain the robust economy in the UK over the remainder of 2015 and into 2016. The tertiary sector remains the strongest contributor, at 78% of GDP, a factor we expect to remain resilient, despite current external market volatility, as consumer spending and domestic demand drive retail and office opportunities over the forecast period.

Domestic demand is expected to remain strong: higher wages coupled with the temporary effects of low inflation have influenced consumer confidence in the short term, and should see sustained levels in the forecast period. We can attribute long-term economic stability to the rise of oil and energy production, which have raised the GDP 0.7% Q215 to a figure of 2.7% y-o-y, after a brief slowdown in Q115 attributed to the volatility in the external economic environment. Eurozone difficulties with Greece's bailout terms and continued sliding of the Chinese stock market is weighing in on investor confidence. Although, there remains uncertainty as a stronger pound becomes an issue for UK exporters, especially when trying to sell to the struggling EU. Concerning the effects to the wider commercial real estate industry up to the 2019 forecast period, we little effect on the growing industry as conditions remain favourable in the UK, such as reduced corporate tax policies, with particular opportunities in London amid the conservative majority victory in May 2015, inducing increased business sentiment.

Company focus is on London city, the most important in the region with a global financial centre and a population of over 8mn people. It is the most urbanised zone and biggest metropolitan region in the UK with a large concentration of tertiary sector businesses centred here. Although, further instability in the services sector from dwindling external markets and the 2008 financial crisis still bear scars, companies have looked for opportunities elsewhere. Increased...

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Industry Forecast
13
Office
14
Table: Forecast Rents, 2015-2016 (USD per sq m per month)
15
Table: Forecast Net Yield, 2015-2016 (%)
15
Retail
15
Table: Forecast Rents, 2015-2016 (USD per sq m per month)
16
Table: Forecast Net Yield, 2015-2016 (%)
16
Industrial
16
Table: Forecast Rents, 2015-2016 (USD per sq m per month)
17
Table: Forecast Net Yield, 2011-2018 (%)
17
Construction And Infrastructure Forecast Scenario
17
Table: Construction And Infrastructure Industry Data (United Kingdom 2012-2017)
17
Table: Construction And Infrastructure Industry Data (United Kingdom 2018-2023)
19
Macroeconomic Forecasts
25
Table: United Kingdom - Economic Activity
31
Industry Risk Reward Ratings
32
Developed States Risk/Reward Index
32
Table: Developed States Real Estate Risk/Reward Index
32
United Kingdom - Risk/Reward Index
32
Rewards
32
Risks
33
Market Overview
34
Office
39
Table: Historic Rents - 2013-2014 (USD per sq m per month)
41
Table: Net Yield, 2013-2014 (%)
41
Table: Terms Of Rental Contract/Leases - H214
42
Retail
42
Table: Historic Rents - 2013-2014 (USD per sq m per month)
44
Table: Net Yield, 2013-2014 (%)
44
Table: Terms Of Rental Contract/Leases - H134
45
Industrial
46
Table: Historic Rents - 2013-2014 (USD per sq m per month)
47
Table: Net Yield, 2013-2014 (%)
48
Table: Terms Of Rental Contract/Leases - H214
48
Competitive Landscape
49
Company Profile
52
British Land
52
Hammerson
54
Land Securities
57
SEGRO
60
Demographic Forecast
62
Table: Population Headline Indicators (United Kingdom 1990-2025)
63
Table: Key Population Ratios (United Kingdom 1990-2025)
63
Table: Urban/Rural Population & Life Expectancy (United Kingdom 1990-2025)
64
Table: Population By Age Group (United Kingdom 1990-2025)
64
Table: Population By Age Group % (United Kingdom 1990-2025)
65
Methodology
67
Industry Forecast Methodology
67
Sources
68
Risk/Reward Index Methodology
69
Table: Real Estate Risk/Reward Index Indicators
70
Table: Weighting Of Indicators
71

The United Kingdom Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's United Kingdom Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in United Kingdom.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for United Kingdom to test other views - a key input for successful budgeting and strategic business planning in the British real estate market.
  • Target business opportunities and risks in United Kingdom through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Industry Forecasts Outlook

Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.

Indicators Include:

  • Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
  • Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
  • economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).

BMI’s Real Estate Risk Reward Index

BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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