The UK’s regional office investment market experienced a slow start at the beginning of the year but investor appetite strengthened, according to the latest analysis of this market.
According to CBRE's Global Investor Intentions Survey 2015, global real estate investors remain confident and their intentions are expansionary, with more than half planning to increase their acquisitions in 2015. Globally, 53 percent of investors plan to increase their purchases this year. Investor appetite for cross-regional acquisitions has increased significantly with 38 percent of respondents intending to invest outside their own region this year-up from 28 percent in 2014. Among these investors, 31 percent identified Western Europe as the top destination. Despite the slowdown in China, 27 percent of investors regarded Asia as their preferred investment destination, with economic growth there still outpacing other regions and continuing to offer significant long-term growth potential. London retained its position as the top city for investment, while other gateway cities such as Tokyo, Sydney, New York and Paris remained in the top ten. Second-tier cities saw an increase in investor interest in 2015, with Madrid, Dallas and Seattle all making the top ten. This reflects investors' search for more attractive yields, as well as greater knowledge and comfort with a larger number of global cities. There is also a marked increase in appetite among investors from Europe, Middle East and Africa (EMEA) and North America for value-add and opportunistic investments. In contrast, Asia Pacific saw a significant jump in investors preferring prime core assets at 43 percent in 2015, compared to 29 percent last year."The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year. Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields-a trend that will result in a stronger focus on value-add and opportunistic investments. We believe that a low interest rate environment, economic expansion in an increasing number of markets, and corresponding improvement in real estate fundamentals will attract capital to commercial real estate," said Chris Ludeman, Global President, CBRE Capital Markets.Office and industrial remain the preferred asset classes, selected by 33 percent and 29 percent of investors respectively. Investor interest in industrial and logistics assets is being driven by the structural change in the retail sector and the growth of e-commerce; however, there is a limited supply of assets in this sector available for sale, meaning that investors will continue to face challenges when sourcing deals.Half of respondents identified asset pricing as the top obstacle to acquiring real estate assets. The tight availability of assets (21 percent) and competition from other investors (19 percent) were also identified as obstacles in all regions."The "new normal" economic environment of moderate growth, low interest rates and compressing bond yields continue to drive investment in commercial real estate. We also observe the continuing globalization of the investment market, reflected by the 40 percent y-o-y growth in cross-regional capital flows in 2014-a figure well above the growth rate for the market overall. The survey findings strengthen our view that overall volumes and cross-regional investment will increase in 2015," said Richard Barkham, Global Chief Economist, CBRE.
If your company bans you from using Twitter, Facebook, LinkedIn and other social media in the office, that policy is "brain dead", entrepreneur Vivek Wadhwa told me.
Wadhwa, listed as one of the 40 most influential minds in tech, is right of course. And here are five reasons, borrowing from several books published this year.
Real estate in the U.K. is reaching boiling point.“There are still opportunities in commercial real estate, but it is incredibly hot out there,” Mat Oakley, head of commercial research at Savills, said on Tuesday to a suited group of industry participants in central London.U.K. property markets are booming amid a rush of foreign investment that first piled into London and is now spreading to other parts of the U.K. Across the country, yields on almost every sector of commercial property, from shopping centers to offices, are at or within 25 basis points of their record lows, Savills data show.“We’re approaching the moment when we’ll see upward pressure on yields,” Mr. Oakley said. “You can’t rely on capital growth going forward,” he said, adding that rental growth needs to be the “question on the front of everybody’s mind.”Alongside the booming property market, real-estate lending has come roaring back, raising the specter of the 2008 credit crunch.A study in May from De Montfort University showed that new lending to property companies jumped 50% in 2014 to £45 billion, the highest amount of new lending since 2008.However, the amount of outstanding debt fell to £165 billion from £180 billion in 2013, data in the report show. With overall lending at 2004 levels, “I don’t see this as too hot,” William Newsom, senior director of valuations, said at the conference.Mr. Newsom noted that senior debt loan-to-value ratios remain low, interest-rate margins are well below pre-crisis levels, the cost of money is low, and the economy is recovering.Even looking at some of the riskier so-called mezzanine debt, “there are some steamy LTVs flying around,” but worries here still remain minimal, as “it’s provided by specialists who know what they’re doing,” Mr. Newsom said.
"Maxwell Brown's 32-year track record serving the UK market, combined with the expertise of its professionals, strengthens our capability to serve the UK market, where we see opportunities for further growth," said Robert Courteau, Chief Executive Officer of Altus Group. "London is one of the most important and strategic real estate markets globally and extending our depth of expertise to a wider area of London is consistent with our strategy."Founded in 1983, Maxwell Brown is an independent provider of commercial real estate advisory services throughout the UK, with significant presence in the southern M25/M23 and South London markets. Maxwell Brown offers a comprehensive suite of advisory services related to property tax (occupied rates and empty rates services), property acquisition and disposal, lease renewals and other corporate real estate requirements. Their clients include institutional corporate property owners, property companies, developers and corporate occupiers. Maxwell Brown's team of 8 professionals will join Altus Group's global Property Tax business unit and will be integrated with Altus Edwin Hill in the UK."We are very excited to welcome Maxwell Brown's professionals to our team, whose expertise and reputation is highly regarded in our industry," said Alex Probyn, President of Altus Edwin Hill. "We see attractive growth opportunities in the UK market and believe that the synergies brought by this acquisition will help us meet a broader range of client needs and add significant value to our combined clients."Maxwell Brown's co-owners Nick Woodman and Jonathan Broome, who will continue to have leading roles in the business, said: "Joining Altus Group has a number of strategic benefits for our clients, who increasingly require fully integrated real estate solutions. Altus Group's global scale, complementary advisory services and innovative software and data solutions will enhance our ability to serve our clients. We also look forward to working closely with Altus Group's UK regional offices to provide a comprehensive service throughout the London and South East property market."The acquisition is expected to be financially accretive to adjusted earnings per share ("EPS"). Additional financial disclosure will be made available in the Company's next quarterly report.
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