2022-10-12-莱坊-Investment_Yield_Guide_October_2022_4页_371kb

Knight Frank Prime Yield Guide – October 2022 Summary

Overview

This report provides an indicative analysis of prime yield data for various real estate sectors in the UK as of October 2022. It is based on rack rented properties and excludes bond type transactions, offering insights into market changes from previous months.

Key Findings

The overall market sentiment is weak, with most sectors experiencing upward yield movements, reflecting increased economic uncertainty and monetary policy shifts. Below is a summary of the main sectors and their performance:

• City Prime (Single let, 10 years): Yields increased from 3.75% in October 2021 to 4.25% in October 2022, with a +0.25% change and WEAKER sentiment.
• West End Core (Prime): Yields rose to 3.50%, stable from prior months, with WEAKER sentiment.
• Major Regional Cities (Single let, 15 years): Yields climbed to 5.00%, up +0.25% from September 2022, indicating a weakening market.
• Life Sciences (Oxford, Cambridge): Yields remained stable at 3.75% to 4.00%, showing no significant change.
• Data Centres (Operational): Yields stayed stable at 4.00% to 4.00%, with steady sentiment.
• Retail and Leisure sectors: Yields saw increases in most cases, with WEAKER or mixed sentiments. For example, Bond Street yields rose to 2.75%, and retail schemes like Open A1 increased with WEAKER indicators.

Market Context

The debt market analysis highlights heightened stress in the UK and Euro area due to global events, with yields and base rates showing volatility. Capital Economics forecasts UK base rates to average 5.0% in 2023, while money market expectations have moderated from prior highs.

Conclusion

Overall, the guide indicates a challenging environment for real estate yields, with most sectors facing declines in value or stability in select areas. For detailed data, refer to the full report or contact the provided contacts for further inquiries.