After a challenging first quarter to the year, Bull and Bear have been given this weekend off to enjoy the sunshine, watch The Masters and, obviously, to eat far too much chocolate.
They will return at the usual time next Sunday. In the meantime, The Weekly would like to wish you and your family a very happy Easter Sunday.
Bear is particularly excited to have received an out-of-the-blue invitation to meet the Chancellor of the Exchequer.
To ensure that they present a balanced view, Bull and Bear agree to draw up a SWOT analysis of the market.
After three months of mixed fortunes, our protagonists share their hot tips for the remainder of 2023.
However, both of them pay a high price for not being attentive to the passing of March (end Q1) into April (start Q2).
Enjoy your Sunday.
Bull and Bear revisit the case for retail investment, particularly in the forgotten High Street sector.
They discover that the e-commerce penetration rate in the UK has fallen back since the COVID-19 pandemic, with online pure-play retailers now facing their own set of challenges.
Not only has the sector now been re-based and re-priced, the retailers who have survived are also 'battle-hardened' for the future.
They conclude that if investors can buy high-quality retail assets and potentially aggregate ownership, they’ll benefit from both a high income return and good capital recovery prospects.
Enjoy your Sunday.
Bull and Bear meet up to discuss their trip to Singapore, the current trends over there and, most importantly, to assess whether they are likely to have an impact on the UK property market.
Singapore is an incredible country but currently ties with New York as being the world’s most expensive cities to live in (according to the Economist Intelligence Unit Worldwide Cost of Living 2022 Report).
Singapore is making steady inroads towards achieving its' aim of becoming Asia’s dominant financial hub.
There has been massive growth in the family office market in Singapore, with families coming not just from Asia, but from Europe and America too.
Whilst there clearly remain some question marks regarding the pound, there is no doubt that UK real estate remains very much on the Singaporean investor' radar. The UK property industry needs to be ready to receive them and to react accordingly.
Enjoy your Sunday.
Our friendly protagonists are making themselves at home at The Bull and Bear on Pekin Street close to Singapore’s Chinatown after a rather traumatic flight from Heathrow.
They are part of the St Bride’s Managers’ team who are in town to promote the case for UK property investment.
Upon exchanging their briefing notes, they conclude that the key messages are as follows:
Whilst acknowledging that the recent political and economic backdrop has been challenging, there are signs that the worst is now behind us.
The 41% fall in the value of sterling against the dollar over the past 15 years provides an attractive starting base for Singaporean-based investors.
The UK have been first movers in hiking property yields and history shows that it will probably be the first European market to recover.
With private equity firms currently priced out of the market by the cost of debt, 2023 is likely to present a compelling window for investment for cash-based investors.
Enjoy your Sunday.
Bull and Bear review the case for office investment in the UK's most dynamic regional cities.
They are encouraged by the strong rental growth for Grade A office space.
They caution, however, against a 'catch-all' approach to regional office investment.
With a clear divergence between prime and average rental growth performance, it is clear that investors will need to be selective.
Enjoy your Sunday.
Bull and Bear meet up to discuss the London office market and explore whether it should be on investors’ buy-lists.
The Central London office leasing market in 2022 was broadly in line with the ten-year average, despite a subdued end to the year.
Prime office rents across all the UK’s key cities are now growing again. The very low availability of prime space, coupled with the appeal of high-quality buildings located in the most sought-after areas, is driving rental values up.
Bull and Bear don’t foresee a stampede for London assets over the next few months. With plenty of capital sat on the sidelines ready to be deployed, the revised pricing should offer significant opportunity for buyers later in 2023.
Enjoy your Sunday.
Bull and Bear venture 'off piste' to review the vertigo-inducing property prices in some of the world's best ski resorts.
They discuss the challenges posed by climate change, the need for a year-round resort offering, and the new breed of executive sNOwMAD driving demand for mountain living.
They conclude that investment in ski destinations that show resilience to climate change and offer dual-seasonality appeal remains a safe bet.
Enjoy your Sunday.
Bull and Bear are having a taxing time.
They use their Weekly get-together to analyse how the Government spends our money and from where the tax originates.
Whilst Income Tax, Capital Gains Tax, National Insurance, Corporate taxes and VAT are the ‘big-hitters’ at the national level, Council Tax and Business Rates provide the life-blood for local authorities.
The revaluation of rateable values comes into effect in seven weeks’ time. Yet, for many other pubs and retail outlets, it cannot come soon enough.
Enjoy your Sunday.
Bull and Bear revisit the state of the UK housing market in light of the latest interest rise on Thursday.
According to Nationwide, house prices in the UK have now fallen for a fifth month in a row, with the average cost of a home some 3.2% below the peak seen last August. This fall, however, is only reversing some of the exceptional property price expansion that has occurred since the onset of the pandemic.
Last week, the Bank of England announced the average mortgage rate for new loans (3.67%) rose in December to its highest level in a decade. Furthermore, mortgage approvals fell to their lowest level since January 2009, excluding at the height of the COVID pandemic.
Significant house price falls are being forecast for 2023. Over 10% in some places. But it is a different, much more positive story for the rental market.
Enjoy your Sunday.
Bull & Bear examine the changing nature of global supply chains in the face of increasing costs and disruption.
They conclude that supply chains will need to be re-configured to provide the necessary resilience, prompting an onshoring and near-shoring of operations.
These changes will have major impacts for the warehouse and the logistics sector in the UK. And Bull, as ever, is keen to capitalise!
Enjoy your Sunday.
This is the third edition of Bull and Bear this year. How time flies! In the first two issues, our friendly protagonists considered the likely impact of the stuttering economy and the sharp rise in yields on the outlook for property performance in 2023.
This week, Bear is in bed suffering from concussion and a broken ankle. Bull tries to be sympathetic, but he cannot stop himself going off on a personal rant about the volume of people still working from home (WFH).
His opinions may possibly reflect his age, but Bull argues that WFH is damaging the economy, destroying the benefits of team-working, impacting on personal welfare and putting massive pressure on shops and restaurants which depend on five-day trading.
Bull is also concerned about the lack of regulation on the space/environment that staff may have to deal with when working from home.
Bull concludes that after having to cope with the challenges of Brexit, the pandemic and more recently, the rising cost of living, the UK has fallen into a national state of lethargy. Somewhat impetuously, he proposes that we should ‘up and the coffee smell wake’ or something very similar!
Despite the positive, if not somewhat surprising economic results this week, CBRE's Monthly Index Result's Call on Wednesday provided yet more sobering news on the state of the UK property market.
The headline capital value loss figure for 2022 for All Property was -13.3%, with some sectors (and sub-sectors) faring far worse. Industrial capital value loss for 2022 was -21.0%, Offices recorded -12.1%, with Retail recording -8.1%, making it the best performing sector of the 'traditional three'.
The Index also shows a -14.6% capital value fall since the beginning of October, with -3.0% in December alone. However, there are some suggestions that property valuations will reach their lowest point in the first quarter of this year, before starting to rise again.
Transactional activity is, however, unlikely to improve meaningfully until the fall in values has run its course and vendors accept that purchasers will only be prepared to buy if the pricing reflects the new reality of higher interest rates.
If pricing settles and rental value growth continues, property total returns are expected to be higher this year than in 2022.
Enjoy your Sunday.
Bull & Bear sift through a pile of Investment Outlook reports in the hope of finding a consensus opinion on the direction of the UK economy.
Whilst there are clearly economic headwinds and heightened geopolitical risks, they are reassured that there are now convincing signs that inflation is starting to moderate and the upcoming recession is likely to be modest.
Whilst 2023 may be a tough year for the UK economy as a whole, it could be an opportune time for savvy investors to secure UK real estate at much reduced prices.
Enjoy your Sunday.
