UK Investment Marketbeat Reports

For the data behind the commentary, download our latest UK Investment Report.

 

STEADY AS SHE GOES… 

In terms of metrics, the first quarter was one of relative stability. We saw £13.4 billion transact. That means that rolling annual investment volumes remain at £55 billion – in line with where we were at the end of Q4. On a rolling basis, this is 29% up on last year, but on a quarterly basis just 1.7% up on the same period last year.   

While there was widespread movement in the financial markets, as of the end of April, there was relatively little yield movement across prime markets, with stability remaining the case across 39 of our reported 45 markets over the last quarter. This leaves six markets where we have seen inward yield movement – with two in retail, three across offices and one in the living sector.   

There was a very small reversion to negative yield impact across the MSCI Quarterly Index. However, capital values increased by 0.4% q-o-q, leaving quarterly total returns at 1.6%, while annual total returns were at 6.5%. All sub-sectors bar one (South East offices) are positive year-on-year. Shopping centres (10.7%) and retail warehouses (12.3%) continue to be the strongest performers, with industrial  (9.2%) performing strongly. 

…or the eye of a storm? 

This has all been against a backdrop of significant market volatility. As you’ll pick up through our views across the sectors, there continues to be a ‘wait and see’ approach from investors on the trade and turmoil that we saw from the start of April. In a number of cases, this is playing out through a lack of investment stock coming to the market, and a variation of opinion on direction of pricing, as well as a polarisation across markets. Considering the volatility that we have seen, this is to be understood and may be for good measure, as we are starting to see an alleviation of the initial barriers laid out in early April.