2023-05-24-莱坊-UK_CRE_Quarterly_Review_May_2023_36页_3mb

报告摘要

UK CRE Quarterly Review May 2023 Summary

Economic Update

Global Economy: Growth outlook uncertain due to financial turmoil, elevated inflation, and tightening financial conditions. IMF revised its 2023 GDP growth forecast for the global economy downward by 10bps to 2.8%.
US Economy: GDP growth slowed to +1.1% in Q1 2023, reflecting the impact of the Federal Reserve's monetary tightening cycle. Unemployment fell to 3.4%, below the long-term average.
Euro Area: GDP growth was flat in Q4 2022, while inflation reached 7.0% in April 2023.
UK Economy: GDP increased by +0.1% in Q1 2023, in line with market expectations. BoE upgraded its 2023 GDP forecast to +0.25%. Unemployment increased slightly, but BoE expects it to remain below 4.0% by end-2024.
Business Activity: Global Composite PMI rose to 54.2 in April 2023, a 16-month high, indicating sustained expansion.

Capital Markets

CRE Investment: UK CRE investment totaled £9.4 billion in Q1 2023, a 57% YoY decline, but volumes increased in Retail, Offices, and Hotels compared to Q4 2022.
Cross-Border Investment: Cross-border investors accounted for 46% of UK CRE volumes in Q1 2023, down from 57% in Q1 2022.
Market Outlook: Real estate performance is expected to polarize, with prime yields widening. Specialist sectors like Student Accommodation and Build-to-Rent are expected to see robust demand due to their counter-cyclical nature.
Knight Frank Capital Gravity: UK is projected to be the top market for cross-border investment in EMEA and the second most invested market globally by cross-border investors behind the US.

Office Markets

City Offices: Investment volumes rebounded to £1.4 billion in Q1 2023, driven by strong prime asset pricing and listing companies/private equity. Prime yields remained stable at 4.75%. However, East End (West End) vacancy rates increased moderately.
West End Offices: Investment volumes decreased by 47.4% YoY, impacted by a lack of quality stock and cautious investor sentiment. Prime yields remained stable.
South East & UK Cities: Investment volumes were on par with the long-term average. Prime yields remained stable at 6.00%, but pricing began to polarize with core assets attracting higher investor demand.
UK Cities Offices: Investment volumes declined YoY. Prime yields remained largely stable, with a tightening of 25bps in Birmingham and Edinburgh. The impact of gilt yields expected to reach 2.75% in 2023 may influence property values.

Industrial & Distribution

Market Overview: Annual UK Industrial capital growth fell to -24.53% in the year to March 2023. Monthly total returns turned positive in March. Investment volumes totaled £1.9 billion in Q1 2023, below 2022 levels but exceeding the pre-pandemic 10-year average.
Supply & Take-up: Average annual take-up was 5.3 million sq ft, with manufacturing and life sciences sectors dominating. Vacancy rates increased moderately, from 3.3% to 4.0% YoY.

Retail & Leisure

Retail: Consumer sentiment showed improvement, but retail sales volumes were still impacted by inflation. Investment volumes slightly increased (+13% QoQ) to £1.2 billion. High street operators showed limited distress, with only two household-name closures.
Shopping Centres: Footfall and sales volumes improved YoY, particularly for Non-Food retail. Vacancy rates improved significantly (-120bps YoY) to 17.8%. Q1 investment volumes fell (-61% QoQ) to £124 million.
Out-of-Town: Investment volumes totaled £514 million, with total returns being the best-performing sector in Q1 at 2.37%. Availability constrained deal volumes.
Leisure: Prime Leisure Park yields remained stable. Investment volumes increased by +29.3% QoQ to £499 million. Wetherspoons disposal of seven assets indicated continued investor focus on the sector.
Foodstores: Sales grew +10.1% but volumes remained impacted by inflation. Investment volumes increased significantly to £765 million, with supermarket REITs and acquisitions driving activity.

Specialist Sectors

Healthcare: Operator occupancies improved, particularly in prime locations. Construction slowed in 2022 but picked up in 2023. Investment volumes were modest in Q1 2023, with prime yields softening slightly.
Hotel: RevPAR growth and occupancy stabilized, though GOPPAR was lower. Transactional market activity increased with corporate investors dominant. London and regional deals saw mixed results.
Life Sciences: Investment was strong in key markets like Oxford, Cambridge, and London. Scientific job vacancies showed no significant change, while new company incorporations reached record levels. Supply in labs remains constrained due to high demand.
Automotive: New car registrations improved, though concerns remain about cost pressures and regulatory changes. Battery Electric Vehicle (BEV) market growth expectations were downgraded due to energy costs and infrastructure concerns.

Key Contacts

Offices Capital Markets: London – Shabab Qadar; South East & UK Cities – Darren Mansfield
Retail Valuation & Advisory: Emma Barnstable
Capital Markets: Antonia Haralambous
Capital Markets & Debt Advisory: Claire Williams
Healthcare Research Lab: Healthcare – Ryan Richards; Life Sciences – Jennifer Townsend; Hotel – Philippa Goldstein; Automotive – Pav Panesar

Disclaimer

Knight Frank's report is for general information only and should not be relied upon. Provided information does not necessarily reflect their views on any particular property or project, and no responsibility is accepted for any loss or damage as a result of their use.

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