Reasons for optimism in the final quarter

With the UK Commercial Property market resuming after the summer break, we’d like to share 3 interesting publications from the last week and a few key points we have picked out which may shed some light on where the market is heading:

CPAD (Commercial Property Auction Data) Report, Sept ’15

  • The highest sale rate in 20 years was seen in July ’15 suggesting supply has been constrained and demand remains strong. This is partly attributed to the difficulty for owner in reinvesting sale proceeds for an equivalent return.
  • Borrowing interest rates are at historic lows
  • The average property yield in auction was 8.82% in May ’15
  • 87% of properties sold were located outside London, demonstrating the increased appetite for regional investment

Allsop Summer Review ’15

  • Improving confidence and tight supply in London is pushing more investment into the regions
  • Whilst the most secure properties are still yielding 4-5%, the highest risk property yields have fallen from 15% to 12.5% in the last 18 months, demonstrating investor appetite for risk has increased.
  • Receivership sales have fallen from 11% to 7% of sales
  • More buyers are buying properties outside of the region in which the live, which reinforces the idea that investors are looking further afield for good returns

Local Data Co Vacancy Report H1 ’15

  • In H1 2015 the GB retail and leisure vacancy rate reduced from 11.9% in H2 2014 to 11.7% (-0.2%)
  • The good news of reducing vacancy rates has run in parallel to better economic performance within the UK, and growing retail sales and consumer confidence.
  • At a town centre level there is considerable variance between the best and the worst. Of the worst, some have endured persistent and rising vacancy for several years now, suggesting there is over supply or the wrong size of space in the wrong location but others have improved as a result of proactive management.

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Current Opportunities

Current Opportunity

Retail & HMO, Southall

2-6 The Broadway, Southall, UK View on map
6701 sq ft
Call for price
Current Opportunity

Tesco Express, Twickenham

246 Powder Mill Lane, Hounslow, UK View on map
Gross Yield % 5.5
4157 sq ft
£ 2,300,000
Current Opportunity
9968 sq ft
£ 450,000
Current Opportunity

Tesco, Shepherds Bush

Tesco Express, 31 Uxbridge Rd, London W12 8LH, UK View on map
Gross Yield % 5.5
3800 sq ft
£ 2,200,000

Vacant, Wokingham

68-70 Peach Street, Wokingham RG40 1XH, UK View on map
6242 sq ft

McDonalds, Wolverhampton

50 Dudley Road, Wolverhampton, UK View on map
10462 sq ft

Nail Salon, Chelmsford

33 Springfield Road, Chelmsford, Essex CM2 6JE, UK View on map
830 sq ft

Ladbrokes, Camberley

Park Street, Camberley, Surrey GU15 3PL, UK View on map
1000 sq ft

Rohan (Outdoor Clothing), Chelmsford

35 Springfield Rd, Chelmsford CM2 6JE, UK View on map
Gross Yield % 7
830 sq ft

Costa Coffee, Bournemouth

1577, 1581 Wimborne Road, Kinson, Bournemouth BH10 7BB, UK View on map
1823 sq ft