Investment supply up, but finance still scarce – Cushman & Wakefield
The supply of investment property has increased, but finance has if anything become even harder to obtain, says Cushman & Wakefield in its latest report on the UK property investment market.
Some sellers of investment property emerged during the past month to test the market and to take profits, while sales by banks and administrators continued, C&W notes. “Overall in fact supply and demand are coming broadly into line – however, the nature of supply still often falls short of investor requirements and of course varies by sector,” the firm notes.
C&W notes higher levels of supply of office space in the City and of secondary retail properties, while prime retail remains typically more supply-starved, it adds. The firm expects more retail stock to be marketed in 2012, but says much of this will be secondary in nature.
Demand for investment property is still strong, but only at the right price and in certain favoured areas, led by West End retail properties, and the markets for prime retail warehousing and industrial property, C&W notes. Within retail, the firm notes an increasingly polarised market, with strong demand in London, good trading at regional malls and more activity at prime retail parks – but caution is rising elsewhere and “it is clear more casualties are likely in the new year”, it adds.
Property investors have the City office market in focus at present, where demand is being held up by requirements from smaller occupiers and from the TMT sector. C&W says this is helping to offset the caution from banking and finance occupiers. It notes that the West End offices market is looking more healthy, with TMT demand again evident amid falling availability levels. While take-up has fallen here, as in the City, the drop in the West End has more to do with supply shortages than occupier caution, the firm adds.
