After a slower than expected start to 2010, the CB Richard Ellis Monthly Index for commercial property showed an acceleration in capital growth for February. Capital values rose by 1.4% last month, producing total returns for All Property of 2.0%.
The best performing sector in February was Central London offices, with total returns of 2.6% and capital growth of 2.1%. Shopping centres also did well, with total returns of 2.4% and capital growth of 1.8%. CB Richard Ellis says this sector is finally enjoying some catch-up after a very weak 2009.
Overall, rental values continued to decline, with an All Property fall of 0.2% suggesting that occupier markets remain under pressure, the group says. However, the flat rental growth reported for Central London offices in February indicates that occupier demand in the capital is stronger.
Nick Parker, CB Richard Ellis economics and forecasting analyst, commented: “Whilst it was prime yields that came back in most aggressively in the latter half of last year, it is the better secondary markets that are slowly starting to attract interest at the beginning of 2010, with investors beginning to look further up the risk curve in a hunt for better returns. It is widely expected that the yield gap between prime and secondary property will slowly narrow over 2010 as competition for good secondary assets becomes more heated.”
GVA Grimley has appointed a new Executive Chairman and Chief Executive as it positions itself for the “next phase of the business cycle”. The new chairman is Stephen Brown, formerly head of planning, development and regeneration, while the chief executive’s role has gone to Rob Bould, formerly head of capital markets at the commercial property consultancy.
Malcolm Whetstone remains managing director, while Donald Smith stays in his position as finance director. Current chairman Steve Halbert moves to the role of deputy chairman. The new team becomes operational from May 1st.
Stephen Brown commented: “The company has performed well under exceptionally challenging conditions. Our broad consultancy capabilities have shown how diverse and robust the business is. We have created a solid platform from which to grow the business as we enter a new phase in the market.”
UK regional office take-up fell 20% in 2009 compared with the previous year, according to DTZ Research. The latest market update for nine UK cities, reported by the Western Mail, shows that take-up fell on aggregate across all nine key regional office markets in the fourth quarter of last year, as expected. This followed some exceptional deals in Q3, particularly in Birmingham and Nottingham, which boosted take-up sharply in that quarter.
The report quotes Rhys James, senior director at DTZ’s Cardiff office, as saying that 2010 looks like being another competitive year “in which landlords will need to work very hard and be particularly generous and flexible if they are to attract new tenants and if they are to retain their existing tenants.”
The report notes that occupiers in 2009 were able to take advantage of the market conditions to consolidate their accommodation or to upgrade to better-quality or more efficient floorspace, while maintaining or cutting costs.
DTZ Research forecasts that take-up in 2010 will be down a further 13% compared with the outturn for 2009, which itself is around 40% lower than the market peak in 2007.
Some further consolidation and release of unwanted space is expected in the UK regional office market, particularly in the banking and insurance sectors, but at a slower rate than in 2009. Availability is likely to have peaked, or will peak, in the first half of 2010 for most markets, the report says, especially as the development pipeline is now more or less exhausted. Headline rents, after falling for several quarters, are expected to remain stable or experience only modest further declines, DTZ adds.
At the BCSC Shopping Centre Management Conference being held this week, speakers have referred to a range of reasons for caution about the short-term outlook for retail property in the UK. However, they have also stated their belief that brighter horizons (the title of the property forum) are not far off, with better times expected in 2011.
At the Bournemouth event, Professor Joshua Bamfield, director of the Centre for Retail Research, predicted slow and steady sales value growth in 2010 overall, but accelerating growth in 2011, reaching 3.4% for the year. He also expects Christmas 2010 to be good for the retail sector, pointing to high personal savings rates in the UK and an improving housing market.
If you are seeking retail premises for sale or to let, or are looking to market your retail properties, then contact Chris at Novaloca.com on 01767 313 380.
A UK commercial property investment fund has sounded a note of caution about pricing in the short term. Investment Week says that Ignis issued a briefing note to investors in its £510m UK Property Fund last week, advising that there is potential for a short-term disconnect between capital value growth and rental value growth.
It said that prime yields ran the risk of over-correcting in the short term, leading to a “moderate retrenchment” in capital values. Ignis says the situation has been made worse by the current lack of high-quality commercial properties available to buy in the market. At the moment 20% of the fund is held in cash.
However, in the medium term the company remains “very positive” towards the commercial property market and expects returns of 8% to 9% per annum over this range. It also expects returns to remain positive in the short term.
CB Richard Ellis says prime yields in the Northern Ireland commercial property market remain stable, although transactions are currently limited to very small lot sizes in towns in the region.
In its bi-monthly review of the Irish commercial property market, CB Richard Ellis notes that attention has recently been focused on the set-up of the National Asset Management Agency (NAMA) in the Republic of Ireland, with many transactions on hold while awaiting the set-up and initial operations of this entity. NAMA is designed to take over and run poorly-performing property development loans from the country’s banks with the aim of improving the availability of credit in the Irish economy. The due diligence process is well underway on those loans on Northern Ireland commercial properties that are due to move over to NAMA, CB Richard Ellis notes.
The forthcoming general election in the UK and the possible effects of public-sector cost-cutting are the major unknowns for the Northern Ireland commercial property market at this point, the report notes. CB Richard Ellis also points out that the question of reducing corporation tax in Northern Ireland has recently been raised – this would clearly give the local economy a huge boost and in turn help the property market in the region, “particularly considering the competitive rents and labour costs relative to the Republic.”
London’s famous Liberty department store building has reportedly been put up for sale. Knight Frank has been appointed as agent and has placed a price-tag of £40m on the Tudor-style landmark, according to press reports. The building is sited just off Oxford Street in one of Central London’s key retail areas.
The retailer is expected to lease the building from the new owner if the building’s freehold is indeed sold by majority owner MWB Group Holdings.
Further to my blog in January, “NovaLoca ranked ahead of EG Property Link”, our rankings have now improved even further! Thanks to our continued efforts we now rank a massive 104,572 websites ahead of EG Property Link.
We are really pleased with this result and are inspired to reach even greater heights. We have an ongoing programme of investment in SEO (search engine optimisation) and our current success is testament to this. The most exciting part is that our latest SEO work will not even be released onto our site until next week.
Much of the SEO work carried out by various websites is a long-term investment, as results are often not realised for six months. Beware of listing on sites that draw traffic from sponsored links – although they can increase traffic this way, it is not a long-term investment for them and can be switched off quickly if the site can’t keep up with payments.
We have been lucky enough to get a sneak preview of some research conducted by The Technology Studio, which reveals NovaLoca.com as the leader of all UK portals and as number 3 in the UK for all commercial property websites in the UK. We will update you when the full league tables are released.
Miranda
Many of you have been loving Novaloca.com’s “pay per property” system and the ease with which charges can be made direct to clients. However, subscriptions that include all properties, automatically fed by an internal system where available, are becoming the favoured alternative.
Quietly released in January 2010, our “new deals” have proved popular. In order to accommodate budgets of all sizes, we are allowing agents to cherry-pick the features they want their listings to contain.
Already this year NB Real Estate, Haslams, Richardson Commercial, Phoenix Beard, Derrick Wade Waters, Anthony J Lewis, Timothy Lea & Griffiths, Maxwell Brown, New Ballerino, Howkins & Harrison and Westbridge & Co have signed up.
Call Chris on 01767 313 380 to get your own tailored quote.
Data collected by the Novaloca.com team shows that our search tools are making our database of available commercial properties for sale and to let even more effective.
Visitors to Novaloca.com are finding exactly what they need more quickly. Each visitor to the site in January 2010 viewed a similar number of pages showing full details of properties on Novaloca.com compared with a year earlier, but a higher percentage of these viewings are becoming leads. In January 2009 an agent needed 51 views of its property details pages to result in a lead but in January this year the figure had dropped to 44, showing that the value of property views has risen by around 13% year-on-year.
And with traffic to the site growing well, the number of leads remains on an upward track. There has been a jump of 45% in the number of unique visitors to Novaloca.com year-on-year as well as continued growth in traffic since the start of 2010 – we have already recorded a 10% increase in site traffic in February compared with the previous month. So while fewer occupiers overall are enquiring about property amid the current economic downturn, the number of enquiries on Novaloca is actually rising.
We have noticed that the number of leads generated per unique visitor is down, perhaps reflecting market conditions, with occupiers interested but not yet ready to commit to a new property. But the good news is that we are attracting so many more unique visitors to the site that this more than compensates for the cautionary climate, as the site is actually delivering 19% more leads to agents.
Agents have told us that with budgets coming under restriction there is generally a lot less money available at the moment for marketing properties in more traditional ways, and this has added to the growing interest in online options, as these are proving to be much more cost-effective.
There are now well over 20,000 properties registered on Novaloca.com including office space, retail properties, industrial units, leisure facilities and land opportunities. To get all your properties listed on NovaLoca call Chris on 01767 313380 or click here to register and start adding properties today.
Miranda
Growth speeds up in February
After a slower than expected start to 2010, the CB Richard Ellis Monthly Index for commercial property showed an acceleration in capital growth for February. Capital values rose by 1.4% last month, producing total returns for All Property of 2.0%.
The best performing sector in February was Central London offices, with total returns of 2.6% and capital growth of 2.1%. Shopping centres also did well, with total returns of 2.4% and capital growth of 1.8%. CB Richard Ellis says this sector is finally enjoying some catch-up after a very weak 2009.
Overall, rental values continued to decline, with an All Property fall of 0.2% suggesting that occupier markets remain under pressure, the group says. However, the flat rental growth reported for Central London offices in February indicates that occupier demand in the capital is stronger.
Nick Parker, CB Richard Ellis economics and forecasting analyst, commented: “Whilst it was prime yields that came back in most aggressively in the latter half of last year, it is the better secondary markets that are slowly starting to attract interest at the beginning of 2010, with investors beginning to look further up the risk curve in a hunt for better returns. It is widely expected that the yield gap between prime and secondary property will slowly narrow over 2010 as competition for good secondary assets becomes more heated.”