Bottom of the Market?

• Bull is convinced that we have reached the bottom of the property market cycle, and it is time to buy.

• Bear is more cautious. He is particularly concerned that adverse news, both on the domestic and global fronts, may cause 10-year gilts to remain at, or above 4% for the remainder of the decade.

• Without a suitable risk premium between bond and property yields, Bear suggests that a sustainable recovery is in jeopardy.

• Notwithstanding their differences, and after undertaking a SWOT analysis of the market, they reach a happy conclusion on what to buy and what to avoid.

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Manchester - Still Top of the League

• With the Government's announcement this week that they will be scrapping the remaining plans for HS2, Bull & Bear meet up to discuss what this means for Manchester.

• In line with St Bride's own UK Key Cities Index, a recent CBRE study revealed that Manchester tops a number of areas, primarily because of it's growing working-age population and strong expected GDP growth.

• The outlook for a number of the city's real estate sectors, including offices, urban logistics and student accommodation in particular, look very encouraging.

• Bull & Bear conclude that with or without HS2, Manchester is still one of their top UK Cities and wouldn't hesitate to continue to invest in some of its most promising sectors.

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Golf Courses - A Hole-in-One Investment?

Bull has caught Ryder Cup fever and today leads a discussion on the health of golf. Some of the main takeaways include:

• Golf has seen a stunning rise in adult participation across the world, up by 34% over the last seven years. 

• There are an estimated 1,790 golf courses in the UK, with Yorkshire being England’s golf course hot spot.

• 11,000 acres of land in Greater London is given over to golf. That’s more than double the size of the London Borough of Hackney. 

• It’s not just those with the housing shortage on their agenda looking at golf courses as solutions to their problems. There have also been suggestions that some could become allotments, biodiverse green space or even urban farms. 

• Despite the rise in demand, lots of golf clubs across the country are having to evolve and enhance their offerings simply to stay afloat.

• Golf courses remain desirable for some investors and are expected to remain so if the growth of the game continues.

Enjoy your Sunday and come on Team Europe!

FOLLOW THEIR CHAT HERE

Pausing Net Zero

• Whilst Bear expresses his deep frustration with the Government's changing policy on climate and perceived lack of global leadership on the issue, Bull believes that it is up to the property industry itself to drive the net zero transition for the built environment.

• Bull reassures Bear that, even if the politicians dither, the industry is already working together on ways to decarbonise our buildings, using exciting technological innovations as the enabler.  

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Bull's Top Picks

• The imminent visit of a prospective investor from Singapore reveals some significant differences in Bull and Bear’s thinking about the best time to re-enter the market.

• Bear is worried that, despite the sharp fall in capital values over the past 12 months, the spread between property yields and gilts is still too thin.

• Bull simply sees the current apathy towards the market as an excellent opportunity to capture some top assets.

• The West End, Industrials within the M25, Oxford and Cambridge and selective Student Accommodation are his top targets.

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Scrambling Students

• Bear's eldest cub is off to university at the end of the month, so Bull and Bear take the opportunity to have their annual discussion on the state of the UK's Purpose Built Student Accommodation (PBSA) sector.

• Rising student numbers, in conjunction with a lack of new development, has left students scrambling for space and universities offering desperate short-term solutions in some cases.

• That being said, they've found that the supply/demand imbalance has led to significant rental growth, steady pricing and consequently a resurgent investment market.

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Subdued Summer

• After a well-deserved break in August, Bull and Bear meet up to discuss what they have missed. They conclude that they haven’t really missed much at all, with the commercial and residential property markets remaining very quiet.

• The UK commercial property market saw a third successive quarter of sub £10bn volume for the first time since 2012.

• BNP Paribas Real Estate expect just £41bn to be invested in the UK commercial real estate market this year, which would be down by a third on both last year and the long-term average. However, pressure on lenders is starting to build, and banks are being increasingly challenged to make a choice between holding their nerve or coming to the market with consensual sales.

• Opportunities are, therefore, likely to present themselves for those with the skill and appetite to capitalise... so don’t write off the rest of 2023 quite yet!

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Artificial Intelligence

• In their final discussion before the summer recess, Bull and Bear employ the help of a friendly Chatbot to help them understand the full potential of Generative Artificial Intelligence.

• They also explore the wider implications of AI on property, covering everything from 'intelligent buildings' and AI-powered underwriting processes, to geographical shifts in market growth as AI companies and investments cluster around established tech markets.   

• They discover that, whilst it's not yet perfect, the potential to apply AI across the property sector is mind-boggling!

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

"Baz-Bull"

• Bull has been enthralled by this summer's sport.  He's been particularly captivated by England's adventurous and entertaining approach to the Ashes.

• As a convert, he believes the UK property industry could learn a thing or two from their refreshing, energetic and courageous brand of cricket.

• Bear is challenged to a Baz-Bull property cricket match.  Six balls, six questions.  Winner takes all.

• Despite some cunning bowling, Bull audaciously slaps the ball around the ground.  It is hard not to enjoy his bravado, but is his approach really the way forward?

• Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

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.

FOLLOW THEIR CHAT HERE

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.

FOLLOW THEIR CHAT HERE

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.

FOLLOW THEIR CHAT HERE

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.

FOLLOW THEIR CHAT HERE

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.

FOLLOW THEIR CHAT HERE