EPMR Economic & property market review - January 2022 INSIGHT - Avison Young
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INSIGHT EPMR Economic & property market review January 2022
Economic
Summary trends
• The Omicron Covid-19 variant, which The Omicron Covid-19 variant, which emerged in early December 2021, has spread rapidly through the UK. A higher degree
emerged in early December 2021, has of transmissibility in this variant has led to an average of over 100,000 new cases per day in December and January. However,
spread rapidly through the UK. A higher a lower level of clinical severity in the Omicron strain, combined with high levels of vaccinations and a supporting booster
degree of transmissibility in this variant program, has meant that hospitalisations have not risen comparatively. As a result, fewer restrictions were imposed across the
has led to an average of over 100,000 UK compared with previous Covid waves, the majority of which were lifted in mid-January.
new cases per day in December and
In November 2021, the ONS estimates that GDP grew by 0.9% to exceed All three sectors reported monthly decreases in PMI figures in December
January. However, a lower level of clinical
the pre-pandemic level of February 2020 for the first time by 0.7%, despite remaining above the 50.0 marker. Manufacturing reported the least
severity in the Omicron strain, combined
beating consensus expectations and achieving the largest growth since decline and the highest rate of expansion at 57.9 as production, new orders
with high levels of vaccinations and
June. Construction and manufacturing output grew by 3.5% and 1.1% and employment all increased while supply chain difficulties eased slightly.
a supporting booster program, has
respectively, with some easing in the supply chain difficulties that have Construction also reported fewer supply issues as well as a reduced rate of
meant that hospitalisations have not
plagued the sectors in H2 2021. The services sector also reported growth material price inflation, delivering a PMI of 54.3 while services decreased to
risen comparatively. As a result, fewer
of 0.7%, however this is likely to have receded in December as a high case 53.6 due to the concerns around and the impacts of rising Covid cases.
restrictions were imposed across the UK
numbers snagged consumer activity in the crucial festive period.
compared with previous Covid waves, BoE data reported that consumer borrowing grew by £1.2 billion in
the majority of which were lifted in Public sector borrowing fell to £17.4 billion in November 2021, £4.9 billion November, the strongest net borrowing figure since July 2020 and the
mid-January. less than the figure recorded in November 2020. Although higher tax eighth consecutive month of increased borrowing. Retail sales also
revenues helped to support government finances, continuing RPI inflation increased by 1.2% in November suggest that consumer spending has
• In November 2021, the ONS estimates has pushed up interest repayments on the immense level of government strengthened along with the wider economy.
that GDP grew by 0.9% to exceed the debt, estimated to total £2.3 trillion – the highest level since WWII.
pre-pandemic level of February 2020 for Gfk’s consumer confidence index decreased to -19 in January from -15 in
the first time by 0.7%, beating consensus The Markit / IHS purchasing managers indices (PMI) for December achieved December, reflecting considerable concerns over cost-of-living increases
expectations and achieving the largest a net balance of 53.6, declining down from the 57.6 recorded in November and Covid-related caution. Combined with lower than expected retail sales
growth since June. Construction and and the lowest figure since February. As it remains in excess of the no- figures for December with a monthly decline of 3.7%, it seems likely that
manufacturing output grew by 3.5% and change 50.0 marker, December’s number suggests that activity expanded retailers in particular will not have an easy start to 2022.
1.1% respectively, with some easing in the for the tenth consecutive month, albeit with reduced momentum.
supply chain difficulties that have plagued
the sectors in H2 2021. The services
sector also reported growth of 0.7%,
however this is likely to have receded
in December as a high case numbers
snagged consumer activity in the crucial
festive period.
• CPI inflation increased by 5.4% in the
year to December 2021, up on the 5.1%
in November and the highest figure since
1992. This figure surpassed consensus
expectations, with the strongest upward
contributions coming from food prices,
furniture and household equipment.Economic
trends
“
LABOUR MARKET INFLATION
The employment rate continued to rise in the three months to CPI inflation increased by 5.4% in the year to December 2021, up on the
While the interest rate November 2021, reaching 75.5%. This remains 1.1 percentage points 5.1% in November and the highest figure since 1992. This figure surpassed
below the level observed in the three months to February 2020 before consensus expectations, with the strongest upward contributions coming
rise may provide a the pandemic. The majority of this shortfall is attributed to an increase from food prices, furniture and household equipment.
in the economic inactivity rate of 1 percentage point which currently
minor drag to growth, stands at 21.3%. In the December meeting of the BoE’s Monetary Policy Committee (MPC),
the decision was taken to increase the UK base rate to 0.25%. While
particularly in the Employment growth in November 2021 was matched by a domestic inflationary pressures were central to the rate rise, the US
corresponding decline in the unemployment rate, decreasing to 4.1% Federal Reserve previously tightened their fiscal policy, also in response to
high-risk short-term to be just 1 percentage point above its pre-pandemic level. high inflation. Without some form of reciprocal action from the BoE, the
outlook, the positive Although the performance of these labour market indicators paints a
positives picture, it is likely that there is some distortion from the size
UK would run the risk of importing more inflation from the US due to the
pound weakening and the dollar strengthening.
performance of the of the labour pool changing. The increase in the economic inactivity For the UK property market, the increased base rate means that the cost
rate at the end of the furlough scheme suggests that a considerable of debt is no longer as favourable. Around three quarters of UK mortgages
economy in November portion of employees removed themselves from the labour market have fixed interest rates, hence the increase is unlikely to cause a dramatic
rather than become unemployed. Consequentially, both the wave for many homeowners.
suggests that there is employment and unemployment rates were partially insulated from
the impacts of the scheme ending. For commercial property, higher rates mean that investors will be looking
underlying strength in Nonetheless, labour demand continues to outpace supply, with
for higher yields, typically attained through risk or rental growth. Hospitality
and retail may serve those with an appetite for risk, particularly as Omicron
the recovery which will vacancies in December reaching a fresh record of 1.25 million. Pay has not derailed the industry as previous waves, hence reducing the future
pressures too are persisting despite a slowdown in the annual nominal Covid downside. More risk-averse investors are likely to look toward the
hopefully prove to be growth rate to 3.8% in the November period, although high levels industrial sector, hoping to squeeze a few extra 0.1 percentage point drips
inflation meant that regular pay growth in real terms was 0.0%. onto the hardening yields through the strength in rental growth.
resilientEconomic
trends
OUTLOOK LATEST CONSENSUS FORECASTS – KEY STATS
JANUARY 2022
The improvement of the performance of Another point to note is that the majority of the
the UK economy during the latest surge in recovery thus far has been sourced through GDP GROWTH
2021 2022
infections, relative to previous Covid waves, consumer activity and government expenditure
provides hope that future Covid variants
(which are likely to decrease in severity) will
– businesses have been relatively quiet.
Business investment has lagged in recovery,
Economic growth (GDP) 4.3% 2.2% 5.5% 1.1%
ease as a major downside risk. Nonetheless, Household consumption 5.8% 2.2% Q2 2021 Q3 2021
11.7% below the pre-pandemic level in Q3
Omicron has caused GDP forecasts for 2022
2021. As Brexit and Covid uncertainty ease and Unemployment rate 4.4% 4.2%
to be downgraded, with Capital Economics
being to fade in terms of market impact, there
anticipating 4.0% growth. Bank base rate 0.5% 0.8%
PMI WEIGHTED AVERAGE
is considerable scope for corporate investment
Higher costs of living, including the increased to rapidly increase, injecting a new lease of life
interest rate, a rise in national insurance taxes into the UK economy. Adding to this potential
CPI - Inflation 4.6% 2.5% 57.8% 57.6%
and the energy price cap in April, may mean is the tax super deduction which incentives RPI - Inflation 6.3% 3.9% November December
that more of those who left work during the plant and machinery investments through
pandemic are more likely to return, providing providing a 130% rebate on the cost. Source: Consensus Economics
some relief to the tension currently visible in UNEMPLOYMENT RATE
the labour market.
2022 ECONOMIC GROWTH FORECASTS
Conversely, the financial squeeze may mean
that consumer expenditure drops, particularly 4.1%
at the lower end of the wealth scale, as high
inflation and slowing wage growth compound Nov 2021
economic hardships.
Further increases in inflation are anticipate WORLD UK EUROZONE
REAL EARNINGS GROWTH
in 2022, with Capital Economics forecasting
a peak in excess of 7.0% in April. The interest
5.9% 6.7% 5.1%
rate is also expected to be pushed up to
1.25%, with the next increase in February
Source: IMF
0.4% 0.0%
to 0.5%. This would be a headache for the (including (excluding
Chancellor ahead of the March 2022 Budget bonuses) bonuses)
and will likely mean that government spending
is limited as a result.
CPI INFLATION BANK RATE
While the interest rate rise may provide a minor
drag to growth, particularly in the high-risk
short-term outlook, the positive performance of
the economy in November suggests that there
5.4% 0.1%
is underlying strength in the recovery which will
hopefully prove to be resilient.Indexed GDP (2016=100)
65
70
75
80
85
90
95
Fe
b
100
105
110
N -97
ov
Au -97
M g-9
MONTHLY GDP
ay 8
Fe -99
b
N -00
ov
Au -00
M g-0
ay 1
Fe -02
b
N -03
ov
Au -03
PURCHASING MANAGERS’ SURVEY
M g-0
ay 4
Fe -05
b
N -06
ov
Au -06
M g-0
ay 7
Fe -08
b
Economic data
N -09
ov
Au -09
M g-1
ay 0
Fe -11
b
N -12
ov
Au -12
M g-1
ay 3
Fe -14
b
N -15
ov
Au -15
M g-1
ay 6
Fe -17
b
N -18
ov
Au -18
M g-1
ay 9
Fe -20
b
N -21
ov
-2
1
Source: Markit & CIPS
Source: ONS
Monthly Change in Borrowing (£billions)
0
2
4
6
8
-6
-4
-2
10
12
14
16
18
Fe
b-
1
Ap 8
r-
1
Ju 8
n-
Au 18
g-
1
O 8
ct
-1
D 8
ec
-
Fe 18
b-
1
Ap 9
r-
1
Ju 9
n-
Secured on Dwellings
CONSUMER CREDIT AND CONFIDENCE
Au 19
g-
1
O 9
ct
-1
D 9
ec
-
Fe 19
b-
2
Ap 0
Consumer Credit
r-
2
Ju 0
n-
Au 20
PUBLIC SECTOR NET BORROWING EXCL. PUBLIC SECTOR BANKS
g-
2
O 0
ct
-2
D 0
ec
-
Fe 20
b-
2
Ap 1
r-
2
Gfk Consumer Confidence
Ju 1
n-
Au 21
g-
2
O 1
ct
-2
D 1
ec
-2
1
-35
-32
-29
-26
-23
-20
-18
-15
-12
-9
-6
-3
0
Source: ONS
Consumer Confidence
Source: Bank of EnglandPeople in employment (millions) %
0
1
2
3
4
5
6
7
8
9
Fe
25
26
27
28
29
30
31
32
33
34
10
b-
0 Ju
Ju 8
l n
D -08 D -06
ec ec
M -08
ay Ju -06
O 09
- n
ct D -07
ec
M -09
ar Ju -07
Au -10 n
g- D -08
ec
Ja 10
n- Ju -08
Ju 11 n
n D -09
N -11 ec
ov
Ju -09
Ap -11 n
r D -10
Se -12 ec
p-
UK base rate
Fe 12 Ju -10
b- n
1 D -11
Ju 3 ec
l
D -13 Ju -11
ec n
UK NET INITIAL YIELD VS GILTS VS BASE RATE
M -13 D -12
ay ec
-
O 14 Ju -12
EMPLOYMENT AND AVERAGE WEEKLY EARNINGS
ct n
M -14 D -13
Economic data
ar ec
Au -15 Ju -13
g- n
Ja 15 D -14
n- ec
Ju 16
n Ju -14
All property net initial yield
N -16 n
ov D -15
Regular pay growth (3 Months)
ec
Ap -16
r Ju -15
Number of People in Employment (aged 16 and over, seasonally adjusted)
Se -17 n
p D -16
Fe -17 ec
b- Ju -16
1 n
Ju 8
l D -17
D -18 ec
ec
10 year gilt yield
M -18 Ju -17
ay n
- D -18
O 19 ec
ct
M -19 Ju -18
ar n
Au -20 D -19
g- ec
Ja 20 Ju -19
n- n
Total Pay Growth (3 months)
Ju 21 D -20
n ec
N -21 Ju -20
ov
-2 n
1 D -21
-6
-5
-3
-2
0
1
3
4
6
7
ec
-2
1
Source: ONS
Source: MSCI monthly index, Bank of England
People in employment (thousands)
% 0 People in unemployment (millions)
2
4
6
8
0
1
-8
-6
-4
-2
Ja
-10
0.2
0.4
0.6
0.8
1.2
1.4
n
M -17
ar
M -17
ay
-1
Ju 7
l-1
Se 7
France
p
N -17
ov
-
Ja 17
n-
Vacancies - services
M 18
ar
VACANCIES
M -18
GLOBAL ECONOMIC GROWTH
ay
-1
Ju 8
l
Se -18
p
Germany
N -18
ov
-
Ja 18
n
M -19
2020
Unemployment rate
ar
M -19
ay
-1
Ju 9
l-1
2021
Se 9
p
N -19
ov
-
Ja 19
United Kingdom
n-
2022
M 20
ar
M -20
ay
-2
Vacancies - Construction
Ju 0
l-2
Se 0
p
N -20
ov
-
Ja 20
United States
n
M -21
ar
M -21
ay
-2
Ju 1
l
Se -21
p
Vacancies - manufacturing
N -21
ov
-2
1
European Union
3
3.4
3.8
4.2
4.6
5
5.4
5.8
Source: ONS
Unemployment (%)
Source: IMFOccupier
Summary market
• Office rental value growth has been Office rental value growth has been modest, with 1.1% over 2021. However, the removal of the work from home
modest, with 1.1% over 2021. However, guidance from the government – hopefully the last time that this measure is required – means that occupiers are
the removal of the work from home likely to have a larger appetite for office space, helping to bolster rental growth.
guidance from the government –
The Big Nine office markets delivered a strong finish to the The ongoing shift online is continuing to drive structural
hopefully the last time that this measure
year, bringing total take-up for 2021 to 8.2 million sq ft, 5% changes in the retail sector, although rental data suggests
is required – means that occupiers are
down on the ten-year average but 42% up on 2020. Q4 take- that the trend may be plateauing with annualised growth of
likely to have a larger appetite for office
up was the highest quarterly total for more than three years, -3.1% in December – the highest figure since January 2019.
space, helping to bolster rental growth.
led by the second largest deal across the big nine on record: Additionally, 2021 saw the fewest number of retailers going
• The Big Nine office markets delivered a HM Revenue & Customs taking 465,000 sq ft at Pilgrim’s bust since before 2007 with the least number of stores
strong finish to the year, bringing total Quarter in Newcastle city centre. There were other large deals impacted since 2017.
take-up for 2021 to 8.2 million sq ft, 5% across the cities, often sourced from technology companies
The industrial market continues to deliver record levels of
down on the ten-year average but 42% such as Roku (115,000 sq ft) in Manchester, Fanduel (58,000
growth with total returns over 2021 achieving 38.4% following
up on 2020. Q4 take-up was the highest sq ft) in Edinburgh and the University of Bristol (74,000 sq ft).
rental growth of 8.9%. Take-up of Grade A space over 100,000
quarterly total for more than three years,
Central London’s office lettings market returned to something sq ft surpassed 49 million sq ft. In a similar scenario to last
led by the second largest deal across
resembling normality in the latter half of 2021, boosting year, e-commerce continued to dominate the occupier market.
the big nine on record: HM Revenue &
end-of-year take-up to 8.7 million sq ft – which is a 71% uplift
Customs taking 465,000 sq ft at Pilgrim’s There is unlikely to be a slowdown in demand for big box
on the volumes seen in 2020, albeit 9% below the long-term
Quarter in Newcastle city centre. There space across all UK regions in 2022, due to the continued shift
average for annual activity.
were other large deals across the in consumer behaviours. With online retail sales forecast to
cities, often sourced from technology Having hit the long-term average for space let in Q3, we have continue growing there will be requirements for even more
companies such as Roku (115,000 sq ft) subsequently seen an end-of-year flurry of lettings, with Q4 industrial units to meet demand.
in Manchester, Fanduel (58,000 sq ft) in figures showing that just shy of 3.1 million sq ft has transacted.
Edinburgh and the University of Bristol This figure represents a 28% increase against the five-year
(74,000 sq ft). average – and is even reflective of a 21% increase on typical
pre-pandemic quarterly volumes as companies begin to shake
• Central London’s office lettings market
off Covid-induced uncertainty and look instead towards the
returned to something resembling
critical role that offices will play in the future of working.
normality in the latter half of 2021,
boosting end-of-year take-up to 8.7 Overall retail footfall across the UK has not recovered to pre-
million sq ft – which is a 71% uplift on the pandemic levels, and has in fact lost considerable ground over
volumes seen in 2020, albeit 9% below the festive period due to Omicron, declining from around 15%
the long-term average for annual activity. below 2019 levels in November to 19% in December.
December retail sales figures declined by 3.7% month-on-
month as early Christmas shopping in November and the
Omicron variant dragged expenditure below consensus
expectations. Online sales, however, only fell by 0.3%.Occupier
market
OUTLOOK HOUSING MARKET KEY STATS
The removal of the ‘Plan B’ restrictions and guidance
in late January is a considerably positive step forward
for business activity and real estate. While Covid
remains a threat, the size of the downside risk it poses
House price growth in the UK remained strong in Q4
despite the initial tapering of the Stamp Duty Land Tax
(SDLT) holiday at the end of June and the final tapering
in September. Nationwide reported 10.4% growth for
“
The removal of the ANNUAL ROLLING VALUE OF NEW
CONSTRUCTION ORDERS
is declining as variant severity combined with high 2021, the highest level for a calendar year since 2006. ‘Plan B’ restrictions and
£11.3 billion
vaccination rates means its impact on people and the
economy is likely to be declining.
This puts the average UK house price at £254,822,
compared to £229,819 at the same time last year. guidance in late January
This is considerably positive news for the real estate There is currently an unusually long lag in is a considerably Q4 TAKE-UP LEVELS
sector, where those who have faired the pandemic transactional activity data from Land Registry but
storm well may now be on the hunt for new spaces mortgage approvals are a good indicator of activity positive step forward for CENTRAL LONDON OFFICES
across sectors. and they have held up well so far following the end
of the Stamp Duty holiday. The number of mortgage
business activity and
In the residential sector, the economic backdrop,
low mortgage rates and a continuation of demand
approvals for house purchase fell 0.2% in November
but were still ahead of their 2014-19 average. Overall
real estate 3.1m sq ft
resulting from reassessment of housing needs will in 2021 transaction levels will be by far the highest we
support continued house price growth and transaction have seen since the Global Financial Crisis.
levels in 2022. Although this will be at more moderate ‘BIG NINE’ REGIONAL OFFICES
levels than we have seen so far. Although we expect the market to cool somewhat next
year, the latest RICS Residential Market Survey and
internet searches suggest buyer demand ticked up
in December, having receded over the previous two
3.5m sq ft
months (although still high). Zoopla have also reported
higher than typical demand for the time of year.
Another factor which will help support price ANNUALISED AVERAGE
growth is very limited supply. According to the RICS RENTAL GROWTH
survey, the number of homes per surveyor at its
lowest level on record except for the housing market ALL PROPERTY
shutdown in Q2 2020.
1.2%
With the unwinding of the SDLT holiday, we expect
wider macro-economic factors to return as the key INDUSTRIAL RETAIL OFFICES
drivers of the housing market. Our near-term economic
outlook is broadly positive although supply chain
pressures and inflation are posing an increasing risk.
8.9% -3.1% 1.1%Rental Growth Over 12 Months (%) Take-up (million sq ft)
0
1
2
3
4
5
6
7
0
2
4
6
8
-8
-6
-4
-2
Ju
10
-10
n Ap
Au -16 r-
g 12
O -16
c O
ct
D t-16 -1
ec 2
Fe -16 Ap
b r-
13
Ap -17
r O
Ju -17 ct
n -1
Au -17 3
Ap
g r-
O -17
c 14
D t-17 O
ec ct
-1
Fe -17 4
b Ap
Ap -18
Retail
r-
AVERAGE ANNUAL RENTAL GROWTH
r 15
Ju -18 O
n
BIG NINE & CENTRAL LONDON TAKE-UP
Au -18 ct
-1
g 5
O -18 Ap
ct
Office
r-
D -18 16
ec
Fe -18 O
ct
b -1
6
Central London offices
Ap -19
r Ap
Ju -19 r-
n- 17
Industrial
Au 19 O
g ct
O -19 -1
ct 7
D -19 Ap
ec r-
Fe -19 18
b O
Big Nine offices
Ap -20 ct
r -1
8
All Property
Ju -20 Ap
n- r-
Au 20 19
g
Occupier market data
O -20 O
ct ct
-1
D -20
ec 9
Ap
Fe -20 r-
b 20
Ap -21
r O
ct
Ju -21 -2
n 0
Au -21 Ap
g r-
O -21 21
c O
D t-21 ct
ec -2
-2
1 1
Source: MSCI Monthly Index
Source: Avison Young
Retail stores affected
0
1K
2K
3K
4K
5K
6K
7K
FAILING RETAIL COMPANIES
Stores Affected
Employees Affected
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
16K
31K
47K
63K
79K
94K
110K
Source: Centre for Retail Research
Retail employees affectedInvestment
Summary market
• Capital values for the UK office market have Capital values for the UK office market have reported a modest 0.3% growth over the course of 2021. Although this
reported a modest 0.3% growth over the means that values remain below their pre-pandemic levels, there is evidence of an upward trend in growth, with
course of 2021. Although this means that December reporting the greatest monthly increase since the onset of the pandemic.
values remain below their pre-pandemic levels,
Sentiment in the regional office investment market remains Retail investment is also performing well with £1.0 billion in
there is evidence of an upward trend in growth,
relatively upbeat. Volumes for the Big Nine office markets December, the highest monthly total since October 2016, while
with December reporting the greatest monthly
recovered to £2.6 billion during 2021, compared to £1.7 billion 2021 as a whole was the greatest annual figure since 2017.
increase since the onset of the pandemic.
in 2020 and 8% up on the ten-year average. This was primarily due to retail warehouse transactions, which
• Sentiment in the regional office investment have proved more resilient over the course of the pandemic in
Well-located, good quality assets with a strong tenant base
market remains relatively upbeat. Volumes for terms of value and footfall. Retail capital value growth finished
continue to receive good levels of interest in the regions,
the Big Nine office markets recovered to £2.6 the year on a high with 7.0% across 2021, however values
particularly those that meet net zero carbon commitments
billion during 2021, compared to £1.7 billion in remain below their pre-pandemic levels.
and fulfil expectations for positive rental growth. While the
2020 and 8% up on the ten-year average.
number of deals slowed towards the end of the year, the Investment volumes for distribution industrial assets are
• Well-located, good quality assets with a strong figures were boosted by the largest deal of the year: owner rivalling the strength of the occupier markets. At the end of
tenant base continue to receive good levels occupier NatWest’s purchase of the £292 million One Hardman 2021, total investment volumes surpassed £11 billion across
of interest in the regions, particularly those Boulevard, Manchester. the UK. Overseas investors were particularly attracted to the
that meet net zero carbon commitments and UK industrial scene. Foreign money was responsible for 57%
Across 2021, almost £12 billion was invested into London
fulfil expectations for positive rental growth. of total volumes, up from the 55% recorded last year, with US
offices. While this is 15% behind the ten-year average for
While the number of deals slowed towards the investors accounting for the highest share. Industrial stock
annual volumes, it nevertheless represents a 50% uplift against
end of the year, the figures were boosted by reported a staggering 32.7% growth in capital values over 2021.
activity in 2020 and comes in 29% ahead of 2019 investment
the largest deal of the year: owner occupier
as global capital once again found its way to London’s shores
NatWest’s purchase of the £292 million One
despite travel restrictions pervading much of the year.
Hardman Boulevard, Manchester.Investment
market
“The industrial sector is
OUTLOOK KEY STATS
The industrial sector is expected to continue
to compress yields to their lowest point, ANNUAL ROLLING INVESTMENT
while office and retail work to shape new TRANSACTIONS VALUE
requirements of space following the ongoing expected to continue to
structural changes. High quality assets in
all sectors will continue to attract capital, compress yields to their £52.1 billion
particularly those with the strong sustainability
accreditations which are fast becoming a lowest point, while office Q1 VOLUMES BY INVESTOR TYPE
fundamental requirement for top properties
and even lower grade stock. and retail work to shape OVERSEAS INVESTORS
new requirements of
space following the 31%
ongoing structural UK PROPERTY COMPANY
changes
38%
UK INSTITUTIONS
Q3 2021 VOLUMES BY REGIONS
15%
London East Midlands
£5.1 billion £3.3 million
South East South West ALL PROPERTY EQUIVALENT YIELDS
£2.1 billion £2.2 million
East of England North East
5.4%
£1.1 billion £2.2 million ANNUAL ALL PROP TOTAL RETURN
West Midlands North West
£8.8 million £1.4 million
19.9%
Scotland Wales ANNUAL ALL PROP CAPITAL GROWTH
£3.3 million £2.2 million
York & Humber Northen Ireland 5.3%
£4.4 million No data% growth £ billion
0
2
4
6
0
5
-8
-6
-4
-2
Ja
10
15
20
n Ap
Ap -16 r-
r- 02
1 Ja
Ju 6 n-
l 0
O -16
ct O 3
- ct
-0
Ja 16
n Ju 3
Ap -17 l-0
r-
1 Ap 4
Ju 7
l r-
0
O -17 Ja 5
ct
- n-
Ja 17
n O 06
Ap -18 ct
r- -0
1
Annual change
Ju 8 Ju 6
l l-0
O -18
ct Ap 7
-
Ja 18 r-
0
n
Ap -19 Ja 8
r- n-
1 O 9 0
Ju 9
l ct
O -19 -0
ct
- Ju 9
ALL PROP AVERAGE CAPITAL VALUE GROWTH
Ja 19
n l-1
Quarterly change
Ap -20 Ap 0
r- r-
2 1
Ju 0 Ja 1
l
Overseas Investors
O -20 n-
1
ct O 2
-
Ja 20 ct
n -1
Ap -21 Ju 2
r-
2
ROLLING ANNUAL INVESTMENT TRANSACTION VOLUMES
l-1
Ju 1 Ap 3
l-2
1 r-
1
Domestic
Source: MSCI
Ja 4
n-
O 5 1
ct
-1
Equivalent Yield (%)
Ju 5
l-1
D
0
2
4
6
8
Ap 6
10
12
ec r-
Se -05 1
p- Ja 7
n-
Ju 06 1
n- O 8
Investment market data
M 07 ct
ar -1
D -08 Ju 8
ec l-1
Se -08
Retail
Ap 9
p- r-
Ju 09 2
n- Ja 0
M 10 n-
ar
D -11
O 21
ec ct
-2
Office
Se -11 1
Source: Property Data
AVERAGE EQUIVALENT YIELDS
p-
Ju 12
n-
M 13
ar
D -14
ec £ billion
Industrial
Se -14
0
5
p-
10
15
20
25
Ju 15 Ju
n l
M -16 Ap -99
ar
D -17 r-
ec Ja 00
Se -17 n
p- O -01
All property
Ju 18 ct
n -0
M -19 Ju 1
ar l
D -20 Ap -02
ec r-
Se -20 Ja 03
p- n-
21 O 04
Source: MSCI Monthly
ct
-0
Ju 4
l-0
Ap 5
r-
% Ja 06
n-
0
O 07
10
20
30
-40
-30
-20
-10
Au ct
g -0
Ap -06 Ju 7
l-0
D r-07 Ap 8
ec r-
Au -07
g Ja 09
n-
Income return
Ap -08
O 10
D r-09 ct
ec -1
Au -09 Ju 0
g l
Ap -10 Ap -11
D r-11 r-
ec Ja 12
NEW CONSTRUCTION ORDERS RETAIL, OFFICE AND INDUSTRIAL
Au -11 n-
g O 13
Ap -12 ct
D r-13
-1
Office, retail & industrial new construction orders
ec Ju 3
Rental value growth
Au -13 l-1
g Ap 4
Ap -14 r-
Ja 15
ALL PROPERTY ANNUAL TOTAL RETURN
D r-15 n-
ec
Au -15 O 16
g ct
-1
Ap -16
Ju 6
Yield impact
D r-17 l-1
ec Ap 7
Au -17 r-
g Ja 18
Ap -18 n-
D r-19
ec O 19
ct
Au -19 -1
g Ju 9
Ap -20 l
Total return
D r-21
Ap -20
ec r-
-2 21
1
Source: MSCI Monthly
Source: ONSShould you wish to discuss any details
within this update please get in touch
James Roberts Joshua Rose-Nokes
Director, Insight Associate Director, Insight
+44 (0)20 7911 2580 +44 (0)20 7911 2566
james.roberts@avisonyoung.com joshua.rose-nokes@avisonyoung.com
Kiran Patel
Senior Insight Analyst
+44 (0)20 7911 2625
kiran.patel@avisonyoung.com
Avison Young is the trading name of Avison Young (UK) Limited. ©2021 Avison Young Created: 01/22 Ref: 12468
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