UK - Commercial Property News November 2019 Compiled by Hayven Property Tax

Commercial property is always a very newsworthy topic. Here is a roundup of the latest news concerning commercial property and investments in the UK, including which sector is outperforming the rest of the commercial property sector.

Commercial Property Rents Rise by 0.4% in Q3 2019

The CBRE have released there quarterly report on commercial property rents. Whilst they report that prime commercial property rents have risen by 0.4% in Q3, the 11th consecutive quarter of increase, it is not all good news.

Retail property saw a decrease of 0.8% in Q3, better than the fall of 1.1% in Q2, and so a positive in the decline.

Prime office rents increased by 0.7% in Q3.

Industrial prime rents increased by 1.7%

In the capital:

Central London take-up was 3.4m sq ft in Q3, rising above the 10-year quarterly average of 3.3m sq ft.

Availability fell by 3% quarter-on-quarter, to 12.7m sq ft at the end of Q3.

Under offers continued to increase, rising by 5% to 4.4m sq ft.

The largest space-take of the quarter saw BT take 328,100 sq ft at One Braham, E1.

For these are more reports please visit the CBRE website.

From the same report and information “cityam” report that office sector rents increased 0.7 per cent, boosted by strong performances in central London as well as east of England, the northeast and Yorkshire and Humber.

However, retail rental values continued to decline, although at a slower rate than the previous quarter, according to the latest research by CBRE.

The decline in high street shop rents slowed to minus 0.8 per cent, from minus 1.1 per cent in the second quarter. Shops in northeast England suffered the steepest decline of four per cent, followed by a fall of 3.4 per cent in Yorkshire and Humberside.

Shopping centre rents were down 0.8 per cent in the quarter and retail warehouse prime rents decreased 1.7 per cent.

Robin Honeyman, senior research analyst at CBRE UK, said: “Third quarter results across the main sectors continued the trends seen in 2019 so far.

“A very slight easing of the downward pressure on retail prime rents meant all property rental growth returned to positive territory.

“However, the 0.8 per cent decrease for shops last quarter is still the third biggest fall for the sector in the last five years”.

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The hidden leverage in the UK’s commercial property sector

Commercial property is all about leverage. Investors are not just buying into shopping centres, logistics sites and office blocks. To state the obvious, they are also borrowing huge amounts from banks or the bond markets to do so, reports the FT.

But, at a time of low-interest rates and high asset prices, something intriguing is taking place in the UK. It appears that ground rent – a kind of rental payment with ancient origins in the country’s land system – is being manipulated to disguise the amount of leverage in the system.

In the UK, ground rent is subject to numerous definitions depending on which century you’re in. It is thought of as the rent you pay for the land alone, rather than buildings. If you buy a flat on a leasehold for a fixed number of years, you will need to pay a sum – typically a few hundred pounds a year – to the freeholder.

You can read our full news article here: www.hayvenpropertytax.co.uk/commercial-property-news-november-2019/