Canary Wharf - A New Direction?

• With high vacancy levels and major occupiers announcing their impending departures from Canary Wharf, Bull & Bear take the opportunity to discuss what the future may hold for the estate.

• Bear gives Bull a quick history lesson on the origins of Canary Wharf and how it transformed into London's second largest office hub.

• The pair then consider the estate's future direction and its attempt to rebrand itself into a centre for life sciences and a residential destination - concluding that there may still be hope for Canary Wharf yet.

• Enjoy your Sunday.

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Fields of Gold?

• Bull and Bear take the opportunity to discuss a topic they should know a great deal about - the UK rural property market.

• Agricultural land has long been regarded as a safe haven during uncertain economic times and a good hedge against inflation. It has also continued to prove its ability to grow steadily over the longer-term (+38% over 10 years and +1,854% over 50 years). 

• Demand for land from buyers remains strong, with much of the interest coming from environmentally-focused buyers, including natural capital investors and funds.

• Rural assets generally produce lower income returns than commercial assets, with capital growth the main driver of total returns for this asset class.

• Enjoy your Sunday.

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Food Chains - Beef or Tofu?

• As food prices soar and the incidents of supply chain disruption continue to increase, Bull and Bear discuss how food chains will need to evolve to ensure our future food security.

• They explore the options for re-shoring the UK's food supply, including adopting new production methods such as vertical farming and urban farming.   

• They, conclude, however, that our diets and consumption patterns will also have to change in order to minimise the food chain's impact on the environment.

• Great news for Bulls, but not such good news for lovers of red meat!

• Enjoy your Sunday.

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Productivity

• It is Bear’s turn to have a moan this week. He is very unhappy about the nation’s low productivity.

• This is not helped by near-record days lost to strikes and 8.8 million working-age people who are economically inactive.

• Unsurprisingly, he cannot resist (yet) another swipe at WFH.

• His main concern though is that the recent hike in interest rates and gilt yields may translate into further falls in capital values.

• With the market seemingly racked with indecision, both our protagonists are demanding more innovation, commitment and productivity to get the property market out of third gear.

• Enjoy your Sunday.

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Supermarkets - Still Super?

• The prominence of certain brands in the news this week has prompted Bull & Bear to discuss the state of the UK supermarket market.

• With long leases, moderate rental growth, generally strong tenant covenants and potential for capital recovery, Bear has long been a fan of the supermarket sector.

• Despite yields having moved out during 2022, they stabilised towards the end of the year and the first Quarter of 2023 saw investor activity in the sector start to pick up again.

• However, the immediate future of the sector hangs on Wednesday's announcement on the latest rate of inflation.

• Poor numbers will inevitably influence the Bank of England's next move on interest rates. Gilt yields, corporate bonds and long-dated leased properties will follow in its wake.

• Enjoy your Sunday.

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HMS - Housing Market Strains

• Following a heavy week of CPD, Bull and Bear revisit the state of the UK housing market. 

• It remains a tale of two stories - one of positivity for the rental market (from a landlord perspective anyway!), and one of concern for the sales market. 

• House prices have just experienced their first annual fall in more than a decade, a sign perhaps that the impact of rising interest rates on household budgets may have brought a halt to the country’s recent housing boom.

• The turmoil in the UK mortgage market shows no sign of abating, whilst the rental market is shows no signs of slowing down either.

• Enjoy your Sunday.

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Hotels - Home or Abroad?

• With the cost of airfares soaring and foreign holidays becoming increasingly unaffordable for many, Bull and Bear discuss the health of the UK hotel market.

• They find that hotel performance is benefiting from a rise in staycations, as well as an influx of foreign visitors, particularly from Asia, the Middle East and North America, attracted by the weak pound.   

• Despite the wider economic challenges, Revenues per available Room (RevPAR) are improving across all the UK's major cities, with occupancy rates also trending upwards.  

• The sector has not been immune from the recent interest rate re-pricing, but the underlying demand dynamics will continue to prove attractive to investors.

• Enjoy your Sunday.

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UK Life Sciences - Ageing Well?

• Having attended Life Sciences Real Estate’s seminar on Wednesday morning, Bull is keen to give Bear his annual sales pitch about investing in the sector.

• London has moved up the world rankings in terms of Venture Capital raised in Life Sciences, although cities in the United States and China still very much lead the way.

• The UK’s ‘Golden Triangle’ of London, Oxford and Cambridge remains a highly sought after investment destination, despite a predicted drop-off in take-up as a result of the current economic headwinds.

• Whilst there is a compelling case for investing in the Life Sciences sector across the UK’s major regional cities, the perception of the ‘Golden Triangle’ remains highly enticing for domestic and international occupiers.

• Enjoy your Bank Holiday Sunday.

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World Cities

• Bull is jubilant that London has been ranked Number One in the St Bride’s Annual World Cities Index for the eleventh year in a row.

• Bear despairs at Bull's contention that he's discovered a close correlation between World Happiness and The Eurovision Song Contest!

• However, in a moment of shared surprise and delight, they learn that the UK has been ranked second in the world for environmental friendliness.

• And … having put their differences aside, they both conclude that domestic investors should be taking advantage of the current softer market conditions, to buy back into London.

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

ST BRIDE'S WORLD CITIES INDEX 2023 HERE

The Age of Analytics

• Bull and Bear meet up to discuss the release of the MSCI/ IPF UK Quarterly Market Results for Q1 2023 which took place on Thursday morning.

• The Index total return for the year to 31 March 2023 was -13.1%, with all sectors, barring healthcare, recording negative returns over the twelve-month period.

• Encouragingly, however, the Index posted an improved total return of 0.1% for Q1 2023, with capital value falls appearing to have moderated. Retail was the best performing sector over the quarter, last ranking top back in 2009!

• The session concluded with a fascinating discussion about the creation of the UK Property Index back in the mid-1980s and an assessment of how the real estate industry, and in particular its reliance on data, has evolved since.

• Enjoy your Sunday.

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Coronation Special

• Bull & Bear are keeping things light this week as they celebrate the Coronation of King Charles III.

• They've decided to discuss some of the more interesting and quirky facts they've learnt this week about the King's property portfolio.

• From owning a branch of McDonalds to paying Prince William rent, some of their learnings may surprise you.

• Enjoy your Bank Holiday Sunday.

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Big Business

• Bull is feeling rather smug at having been invited to Rishi Sunak’s Business Connect Forum.

• He is convinced that the route to solving the UK’s financial problems is to promote Big Business.

• Bear, on the other hand, has some startling statistics that show how hugely influential SMEs and micro-businesses can be on the economy.

• However, both of our protagonists are rather surprised, and disheartened, at how little real estate services contribute to the bigger picture.

• Enjoy your Bank Holiday Sunday.

FOLLOW THEIR CHAT HERE

UK plc - Ageing Gracefully?

• Against a backdrop of strikes and industrial action, Bull and Bear discuss the UK labour market and the potential impact of demographic changes on UK productivity in the future.

• They conclude that a focus on the unemployment rate masks a recent rise in the number of people classified as "economically inactive", a figure that will only increase as the working-age population in the UK declines.   

• These wider demographic changes impacting the labour market and the Old Age dependency ratios will inevitably have implications for the property sector over the next 20 years.

• Enjoy your Sunday.

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Time for Bottom Fishing?

• Bull and Bear meet up to discuss the state of the UK commercial property market following the end of Q1 2023 and the Easter break.

• Property investment volume numbers show that investors remain in wait-and-see mode. Only £5.6bn was transacted in Q1, making it the lowest quarterly volume since 2009.

• Investor confidence has, however, started to return. Pricing levels have generally plateaued, but in some sectors, such as retail warehouses and regional offices, yields have sharpened. There are still, however, some sectors where further yield softening should be expected. 

• There is an estimated $US811bn in dry powder sitting in the accounts of unlisted funds globally waiting to be deployed. 

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE