On the back of a study by CBRE entitled 'The Value of Green Building Features', Bull and Bear discuss the evidence and its implications.
They discuss whether green premiums can actually be quantified and whether the risk of inaction by investors could ultimately leave buildings obsolete.
The conclude that, at the very least, investors need to implement sustainability measures to protect the value of their assets.
Enjoy your Sunday.
After returning from their summer holidays, Bull and Bear meet up to review the latest UK property news.
According to Savills, five sectors reported outward yield shifts of 25 basis points in July, up on the three in June, bringing their average prime yield to 4.88%.
The preliminary July monthly investment volumes figure of £2bn is the weakest since August 2020 and down from a monthly average of £5.4bn during the first six months of 2022.
Rental levels for best-in-class office space have continued to rise over the summer.
According to Penfold, the average price of a London pint could climb to a staggering £13.98 by 2025. Really?
As the world’s population is about to pass eight billion, Bull and Bear consider the ramifications of the UN’s latest demographic predictions.
The UN reckon that on 15 November 2022 the global population will pass eight billion. If we all held hands, we would wrap around the Earth three hundred times!
The global population is expected to reach 9.7 billion by 2050. More than half the projected increase will be concentrated in just eight countries.
The additional 10 million people who are going to be living in the UK over the next twenty-eight years is the equivalent to another London and Birmingham combined.
The share of the global population aged 65 years plus is expected to rise from 10% to 16% by 2050. In the UK, it is even higher.
In the aftermath of the heatwave, Bull & Bear examine what the property industry can do to reduce carbon emissions and play their part in mitigating the impacts of climate change.
They discuss measures to reduce both operational carbon emissions and embodied carbon, as the industry strives to achieve the much-feted "net zero" targets set by the Government.
For once, they seem to be largely in agreement!
Battling against the ongoing heatwave, Bull and Bear meet up to discuss the London office market and explore whether it should still be on investors’ buy-lists.
According to Remit Consulting, office occupancy in Central London was only 29.3% in the middle of May.
Both Savills and CBRE have recently increased their prime City office yield from 3.75% to 4.00%. Prime West End Office Yields remain at 3.25%.
Asian Pacific investors have been the most active on the buy-side this year for City offices, whilst over in the West End, North American investors have been the most active buyers by volume.
All the recent political and economic upheaval has unnerved investors and encouraged them to disappear off on early, and extended, summer holidays.
Whilst holding steady for now, asset valuations are under scrutiny, not least as rising borrowing costs are eroding on net income.
As one of the key drivers of real estate activity, Private Equity firms will be particularly susceptible to less favourable debt markets. Yet, there is a record amount of PE ‘dry-powder’ seeking a home.
Unsurprisingly, Bull recommends that investors should hold their nerve and wait for decent buying opportunities. Bear is more faint-hearted.
After a day exploring Bristol as part of Hartnell Taylor Cook's annual Commercial Property review, Bull gives his insights into what this "Key City" for investment has to offer.
Bull & Bear provide a quick health check of the industrial, office and retail sectors, and discover that Bristol is (largely) in rude health.
After a week stuck at home due to train strikes, Bull and Bear meet up in their usual pub to discuss the hospitality sector and explore whether it should be on investors’ buy-lists.
The hospitality sector represents 10% of UK employment, 6% of businesses and 5% of UK GDP.
According to UKHospitality, more than 10,000 pubs and restaurants are at risk of closure. Lots of independent operators are already handing in their keys and walking away.
According to Knight Frank/MSCI, between 1981 and 2020, Leisure Parks considerably out-performed virtually every other mainstream property asset class, delivering an annual average total return of +11.2% (All Property +8.6%, All Retail +8.0%).
The current spread in yields between leisure and the other main sectors is pretty eye watering.
Bear is not happy. He has been overcome by the recent deluge of bad economic, financial and political news.
Bull tries to cheer him up with good news on three fronts - world cities, the happiest places and the most environmentally friendly countries.
London tops St Bride’s Annual World Cities chart again. This is the tenth time in a row.
But bad behaviour could be costly to London’s international reputation.
After witnessing the capability of drone technology at the spectacular Jubilee light show over Buckingham Palace, Bull & Bear discuss why the property industry is yet to harness the full potential of these autonomous flying vehicles.
They review drones' current uses in the industry and the likely areas for potential drone expansion, particularly in the warehouse and logistics sector where they have the potential to revolutionise inventory management.
Are we really moving towards a world where thousands of drones buzz over our towns and cities every day delivering groceries and parcels? Or will the inherent risks of flying vehicles, and the regulatory minefield in which they'll have to operate, limit the extent of their commercial use?
Bull: Hey Bear, I have a cunning plan.
Bear: What?
Bull: Let’s skip this week’s edition of The Weekly. With all the celebrations going on, I bet no-one will even notice!
Bear: Now, that's a great idea. We can still show a ‘Click Here’ box below to fool everyone, but, if anyone does try it, it won’t actually lead to anything, other than a photo of our street party. We can blame it on an unfortunate IT fault.
Bull: Smart thinking! What are our chances of getting away with it? You don’t think St Bride’s will get all grumpy and dock our pay?
Bear: No chance. I know for a fact that they are all out celebrating the Queen’s Platinum Jubilee. And I do wonder whether they are likely to be in a fit state to read it, anyway!
Bull: Okay. Let’s do it. Or rather, let’s not do it!
Bear: Agreed. In which case, let’s get back down to the party with the rest of the gang.
Bull: Great. Enjoy your Sunday!
