2022-12-02-莱坊-Investment_Yield_Guide_December_2022_4页_385kb

Summary of Prime Yield Guide – December 2022

This report, prepared by Knight Frank Intelligence on 1 December 2022, provides indicative data on prime yields for various real estate sectors. It is based on rack rented properties and excludes bond type transactions. The yield data displays changes over multiple months, showing percentage increases and decreases for a range of sectors.

Economic Context:
The global economy is noted for potentially peaking inflationary pressures, with factory gate prices and commodity prices moderating from highs. However, inflation remains elevated in the UK and Eurozone due to factors like the impending ban on Russian oil. The UK’s price balance fell for three consecutive months, reflecting easing supply constraints. Debt market indicators show margin increases partly due to economic uncertainty, while Solvency II reforms may enhance investment flexibility in the insurance sector, potentially benefiting long-term investments like commercial real estate. Real estate must address energy consumption to reduce emissions, accounting for approximately 40% of global energy use in buildings.

Yield Trends:

• Across most sectors, yields saw an overall increase or mixed changes from December 2021 to December 2022. For instance:
  • City Prime (Single let, 10 years) rose from 3.75% in December 2021 to 4.50% in December 2022, with a sentiment rating of WEAKER.
  • West End Prime Core (Mayfair & St James's) showed similar increases, ending December 2022 at 3.50%.
  • Warehousing and distribution sectors, like Prime Distribution and Warehouse, displayed positive yield changes (e.g., from 3.00% to 4.75% for some variants), but with WEAKER sentiment.
  • Retail, office, and industrial sectors generally seen as weakening, with yield rises but indicating market headwinds.
  • Notable exceptions included Data Centres (Operational) maintaining STABLE yields and Bond Street showing WEAKER trends with increased yields.
• Changes are frequently negative, reflecting economic dislocation, though sentiment is predominantly WEAKER across the board.

Key Contact Information:
Knight Frank Intelligence provides this guide and encourages correspondence for property advice. Primary contacts are listed, including roles from valuation and advisory advisory through investment and lending. Additional resources and contact details are available.

The overall conclusion suggests a market environment characterized by rising yields amid persistent inflation and a cooling global economy, with caution suggested for investors based on sector-specific data.