Study Just Published: United Kingdom Real Estate Report Q1 2010

Jan. 12, 2010 - PRLog -- The UK real estate market is still being hit by the recession, and its prospects are mixed. The outlook for the residential property market remains uncertain. As the economy improves and credit becomes more available, house prices will rise over time. However, the recent gathering upsurge in prices over the year is regarded by most researchers as unsustainable in the short term, due to the fragile state of the economy. Demand for office rentals will depend largely on the future development of the financial services sector, which has continued to contract and shed jobs, although at a reduced rate. Globally, the worst of the recession is over. However, the UK economy, while over the worst, is still in recession, with a preliminary GDP contraction of 0.4% for Q309. We have forecast real GDP growth of 0.8% for 2010. Almost a third of London's office space has been taken up by banking and finance, and another third by business and professional services, according to figures for 2007. So the extensive decline in London's financial services sector has severely affected the office rental market. The UK office rental market is forecast to fall by 12.6% in 2009, according to CBRE. Office rents are expected to continue to fall into 2010, and then bottom-out in about mid-2010 before recovering (some markets, such as London city, may recover sooner). Then they are expected to grow continually from 2010 until the end of the forecast period - from US$45.7 per square metre per year (m2/year) in 2009 to US$71.1m2/year in 2014. The major regional centres were also hit by the recession in 2009, but they are mostly expected to recover during 2010. Although they are less dependent on the financial services sector than London, demand for office space in the regions has been hit especially hard by unemployment. The unemployment rate is expected to peak at end-2009 or early 2010, then ease through 2010. Demand for regional office space in these areas has largely been due to churn - including relocation, rationalisation and upgrading. The public sector has been responsible for the largest take-up of regional office space in H109, followed by the business services sector. Government departments have been moving away from central London to other major regional centres. There are conflicting signals regarding the future of the retail rental market. Some researchers predict a further deterioration, with no indication of improvement in the short to medium term. Others see a fall in vacancy rates with a gradual improvement, especially leading up to the Christmas season. Prospects for the retail market depend on trends in consumer confidence and consumer spending, which in turn hangs on the state of the economy.

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Partial Table of Contents:

Executive Summary
- Key Features Of This Report
- SWOT Analysis
- UK Real Estate/Construction Industry SWOT
- UK Economic SWOT
- Real Estate Market Overview
- Office Rentals And The Financial Sector
- Regional Centres
- Residential
- Key Projects
- Construction Overview
- New And Ongoing Projects
- Commercial Construction
Table: Major UK Infrastructure Projects - Transport
Table: Major UK Infrastructure Projects - Energy And Utilities
Table: Major UK Infrastructure Projects - Construction
- Special Events: Olympic Games
- Real Estate Investment Trusts - End 2009
Table: FTSE EPRA/NAREIT Global Real Estate Indices Total Returns (%, US dollar terms)
- North America
Table: US REITs - Total Returns (%, US dollar terms)
- Asia Pacific
- Europe
- Industry Finance Outlook
- Global Outlook
Table: Loan Growth, 2006-2013 (% change y-o-y)
Table: Loan-To-Deposit Ratios, 2006-2013
- Regional Outlooks
- Central And Eastern Europe
- Latin America
- Emerging Asia
- Middle East
- Sub-Saharan Africa
- UK Monetary Policy
Table: United Kingdom - Monetary Policy 2007-2014
- Industry Forecast Scenario
- Western Europe Real Estate Figures
Table: Housing Prices At A Glance - Western Europe
Table: Office Rents In Western Europe - CBRE
Table: Office Rents In Western Europe - Other Sources
Table: Current And Forecast Office Rents, 2008-2014 (US$ per square metre per month)
- UK Real Estate Forecasts
- UK Construction Industry Forecasts
Table: UK Construction Industry, 2008-2013
- UK Macroeconomic Outlook
Table: United Kingdom - Economic Activity 2007-2014
- Business Environment
- Real Estate/Construction Business Environment Rating
Table: Europe Real Estate/Construction Business Environment Rating
- The UK’s RECBER
- Western Europe Project Finance Ratings
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating
- Company Monitor
- A&J Mucklow Group
- Balfour Beatty
- Bovis Lend Lease
- British Land
- Hammerson
- Land Securities
- SEGRO
- BMI Methodology
- How We Generate Our Industry Forecasts
- Construction Industry
- Bank Lending
- Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
- Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase - Commercial Construction