UK MarketBeat Reports

15/08/2019
Cushman & Wakefield MarketBeat reports analyse quarterly UK commercial property activity across office, retail and industrial real estate sectors including supply, demand and pricing trends at the market and submarket levels.

Office

The economy showed better-than-expected growth in the three months to August with growth of 0.3% allaying fears of a technical recession after the negative growth experienced in the second quarter of the year. Employment remained high, with 75.9% of the population in work at the end of August. CPI inflation is at 1.7%, below the Bank of England’s target rate. The economy is proving resilient, although momentum appears to be slowing, particularly in the service sector which failed to expand.

In London, leasing volumes remained relatively stable at 3.1 million sq ft and marginally above the five-year quarterly average level. In the UK regions, availability fell for the seventh consecutive quarter; at the end of Q3 2019 there was 7.5 million sq ft available to lease, 22% below the five-year average. 

Retail

The growth in retail sales volumes averaged 2.5% y-o-y during July and August, pointing to an overall slowdown in Q3 compared to the previous quarter (3.6% y-o-y). Online sales continued to grow at c.10% y-o-y, accounting for 19.7% of all retailing in August. Despite ongoing uncertainty, the Consumer Confidence Index has held broadly stable during 2019 to date. In part, consumer confidence has been underpinned by a robust labour market and stable inflation. CPI remains close to the government’s target of 2%, with the fall in global oil prices appearing to offset currency-linked inflation in the UK.
 
Occupational metrics are volatile, with further financial distress and administrations reported during the third quarter of the year. Retailers’ profit margins are under pressure in an intensely competitive pricing environment, the effect of which is compounded by rising costs and political uncertainty. 95 retail assets transacted during the third quarter of 2019, totalling £1.1bn – a 43% reduction on the previous quarter, and a 65% decline on Q3 2018. 

Industrial

The occupier market remained resilient in Q3, with take-up to date on a par with its long-term average. Meanwhile, investment activity has slowed, with many investors waiting on the sidelines for Brexit uncertainty to clear. 

During Q3, take-up rose by 15% y-o-y to reach 8.6 million sq ft. At 24 million sq ft, take-up in the first nine months of the year is in line with recent years. Approximately £1.4bn transacted in Q3, leaving year-to-date volumes 29% lower than the corresponding period last year.

Get the full UK property market picture with all the market data by downloading the reports.

Current Marketbeats

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UK Office Market Data

Office Marketbeat is a summary of the UK office property sector in key cities, providing comment on recent trends as well as market data and analysis.

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UK Retail Market Data

Retail Marketbeat is a summary of the UK retail property sector in key cities, providing comment on recent trends as well as market data and analysis.

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UK Industrial Market Data

Industrial Marketbeat is a summary of the UK industrial and logistics property sector providing comment on recent trends as well as market data and analysis.

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