Ian Houston
Singapore Spring
Singapore Spring

Misunderstandings and Unexpected Consequences

  • Welcome to this school half-term Bull and Bear parody issue. Any resemblances to Messrs Trump, Xi Jinping and Putin are entirely coincidental.

  • Both Bull and Bear have been on the conference trail recently, with very mixed results.

  • Bull was keen to update his knowledge on AI and was staggered by the seminar’s content.

  • Bear had just returned from the Annual Bears R Us Global Convention. With the UK taking something of a beating, he couldn’t resist predicting that we are set to ‘knock the socks off’ other global markets.

  • Enjoy your Sunday.

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Headaches for Housebuilders

  • On the back of the news this week that Barratt has agreed to buy Redrow for £2.5bn, Bull and Bear discuss the growing consolidation of the UK house building sector and explore the challenges faced by house builders at the other end of the size spectrum.

  • The time taken to achieve an outline permission has increased fourfold since the early 1990s, whilst the associated costs of obtaining a planning consent have risen too. The politicisation, and associated risk associated with achieving planning permissions has also increased, exacerbated by a lack of public sector capacity. The result of all this for SME house builders is draining.

  • In 1988, SME builders built 40% of all homes. In 2020, it was just 10%. The loss of SMEs is affecting the UK's ability to meet its house building targets.

  • Enjoy your Sunday.

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Bear's 2023 Investment Breakdown

  • Bull is in good spirits this morning but as usual, Bear is on hand to bring him back down to earth.

  • Bear has spent the week reading reports on the finalised figures for 2023’s total investment volumes and as expected, it makes for some sobering reading.

  • He breaks down his findings for Bull, detailing both where the limited investment went, and where the capital came from.

  • Bull, undeterred by Bear’s pessimism, manages to find some positive take-aways ahead of 2024. Of course he did!

  • Enjoy your Sunday.

    Click Here to Follow Their Chat

2024 - Searching for Positivity

  • Relieved to say goodbye to 2023, Bull and Bear reflect on the past twelve months in the hope of finding some positive signs for the UK property industry in 2024.

  • Whilst commercial property investment volumes plummeted in 2023 to hit a decade low, All Property Total Returns were positive at 1.70% for the year. 

  • Commercial property rental values also increased by 3.60% over the last twelve months.

  • Enjoy your Sunday.

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'V' or 'U'? That is the Question

  • It’s the final edition of Bull & Bear before Christmas and both our protagonists are in disagreement over how they expect the market is going to recover in the coming few years.

  • Bull, ever the optimist, believes the market will make a sharp ‘V’- shaped recovery and Capital Growth will begin improving next year.

  • Bear tempers his expectations, citing a prolonged period of high interest rates keeping Capital Growth stagnant and suggests the market will look more like a dragged out ‘U’.

  • Bear goes on to make the case that investors need to prioritise their Income Return in order to maximise value through this period of low Capital Growth.

  • The duo agree to settle on a subdued 2024 but expect the market to begin improving in 2025-26.

  • Enjoy your Sunday.

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The Farming Edition

  • Bull pulls on his green wellies and ventures into the countryside to explore the merits of investing into farmland in the UK.

  • Bear, whose knowledge of farming is based almost entirely on 10 episodes of Clarkson's Farm, needs some convincing.

  • What they discover, however, is that farms can provide a safe haven for capital, delivering good, long term performance underpinned by the need for food security and the demands of a growing (and ever greedier) population. 

  • Enjoy your Sunday.

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Catching Up and Fixing Our Mistakes

  • Today, Bull, and his three Mallorcan golfing chums, complete their trilogy of Reflective musings.

  • They have already covered the imperatives of marking valuations to market and adjusting asset allocations in line with changing demographics.

  • Today, they call for a closer alignment between investors and occupiers via operating agreements rather than traditional leases.

  • And most importantly, they reflect on the necessity for the market to adopt an all-embracing balanced scorecard to reflect both financial and non-financial performance.  

  • Enjoy your Sunday.

PS. Thanks to Nick Cooper, Stephen Pyne and Mal Parker for their insights.
PPS. Particular thanks to Mal for being a good sport.

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Investing in the Right Sectors

  • Last week, Bull shared the first part of a trilogy of musings from when he and his mates (Mal, Nick and Steve) from the old days were on a recent golfing trip to Mallorca.

  • His first reflections were on valuations and performance indices.

  • This week, he focuses on how demographics will influence the success, or failure, of certain types of assets.

  • He concludes that, whilst some sectors are plainly more popular than others, it remains important not to lose sight of balance and diversification.

  • Enjoy your Sunday.

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A Reflective Bull on the Rampage

  • Whenever Bull returns from his holidays, everyone knows to run for cover. This time is no exception.

  • Whilst away, he met up with some of his old mates and had a good old chinwag about the state of the market.

  • Their Reflective thoughts, and some spirited guidance, will be revealed in The Weekly over the next couple of weeks.

  • This week, Bull focuses on the use and abuse of valuations and performance indices and why it is important they reflect reality.

  • Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

An Open-Ended Future?

  • In light of some recent negative headlines, Bull and Bear discuss the future of the open-ended UK property fund sector.

  • Over the last month, St Jame's Place has decided to suspend dealing in their £826 million property unit trust, M&G have set out plans to wind down their £565 million Property Portfolio fund and Canada Life Asset Management has suspended withdrawals from one of their funds.  

  • There continues to be a mismatch between investor demands (for daily trading) and the liquidity of the underlying assets. 

  • The property industry still awaits the outcome of the FCA's regulatory cogitations, but in the meantime have been working on possible solutions and alternatives including Reserved Investor Funds.

  • Enjoy your Sunday.

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South Africa vs New Zealand

  • Half term has taken its toll on Bear, so Bull has agreed to have a slightly shorter chat this week.

  • In light of the Rugby World Cup final taking place between South Africa and New Zealand last night, Bull has done some research on both country's property markets.

  • He presents his findings to Bear, who unsurprisingly can't be convinced to invest in either of those locations ahead of his safe havens of London and St Bride's UK Key Cities.

  • Enjoy your Sunday.

FOLLOW THEIR CHAT HERE

Single Family Housing

  • Bull and Bear put aside their disappointment at England's last gasp semi-final defeat to South Africa in the Rugby World Cup, to focus on the Single Family Housing market.

  • Bull, at least, is excited by the growing number of opportunities to invest in a sub-market that's underpinned by high occupancy rates and resilient income streams, as well as offering investors the chance to make a meaningful contribution to the UK's housing supply. 

  • Enjoy your Sunday.

FOLLOW THEIR CHAT HERE