Over the past 25 years, UK pension funds have radically re-shaped their investment portfolios. Over 50% is now invested in bonds.
Both the private equity and property markets are constipated, and ongoing illiquidity is beginning to cause some snags in funding new initiatives.
Amongst a number of potential ‘wow-ing’ ideas, Bull optimistically suggests a switch in allocations out bonds to help get the sectors moving again.
Enjoy your Sunday.
After a tough week of TV watching, including the England football team and the final Sunak vs Starmer election debate, Bull and Bear meet up to discuss the property-related policies included in the manifestos of the main political parties.
Consistent themes addressed by all the parties include unlocking the housing market (and addressing the need to increase the supply of housing), planning reform and increasing the rate of economic growth in the UK.
It shouldn't come as a huge surprise that the degree to which the various parties have made commitments to increase housing delivery differs significantly!
Research suggests, however, that regardless of which political party ends up in power, there isn’t any real difference to the overall performance of the UK real estate market.
Enjoy your Sunday.
Bull & Bear are focused on two important puzzles.
Why are Gareth Southgate's England team struggling to find any semblance of form in the Group stages of Euro 2024?
And why has the UK's productivity stagnated so sharply since the Global Financial Crisis?
Bull believes Anthony Gordon holds the key for the England team, whilst Bear turns to an in-depth report by Bidwells ('The Productivity Engine') to understand why a lack of investment is holding back the UK.
Despite Scotland's disappointing performance at the Euro 2024 opener on Friday night, Bull has been channelling his inner-Scot this weekend.
Bear questions his somewhat dubious ancient connections, but asks for a run-down on the property market.
Bull reveals that with consistent rental growth across the board, yields sharpening in some sectors, and the prospect of Scottish Independence looking increasingly unlikely, now could be a very good time to invest in Edinburgh.
Enjoy your Sunday.
Bull has been invited to be a panellist at the upcoming Annual AREF conference and needs some ammunition. His topic is the resilience of property and property funds.
Both he and Bear agree that, over the past fifty years, the sector has successfully pivoted in line with changing socio-economic demands and are generally happy with the resilience shown by the sector.
But Bear warns that the future is less straightforward, not least as the asset classes which are likely to be in most demand (healthcare, retirement living etc) are currently very heavily influenced by government policy.
Enjoy your Sunday.
Following a shopping trip during half-term, Bull and Bear meet up to discuss the state of the UK shopping centre market.
On the back of results released by Hammerson and Unibail-Rodamco-Westfield, there is increasing evidence that best-in-class retail space is starting to recover and that rents are growing in the right locations. But for non-prime centres, it still remains a very difficult story.
Although investors are increasingly seeing opportunities in the best-positioned schemes, the UK shopping centre investment market can best be described as ‘muted’, with Q1 2024 being one the five quietest first quarters in the last thirty years.
Enjoy your Sunday
After attending a talk on the future of real estate investment management, Bull is in a reflective mood.
The pair conclude that the need for active asset management has never been so acute, especially as the real estate landscape is breaking up into different asset types, which require specialist operators.
However, the inexorable trend towards investment in operational (management-intensive) sectors will also force investment managers to adopt new models to harness operator expertise and deliver an enhanced level of customer service.
Enjoy your Bank Holiday Sunday.
Bull has just returned from his week in Singapore and is looking slightly worse-for-wear. Bear wastes no time in asking him how he got on.
Bull provides a short insight into Singapore, its domestic property market and most importantly, whether their family offices have any interest in the UK.
He concludes that while investors remain interested in UK property, they'd like to see interest rates come down before they give the green light to investing again.
Enjoy your Sunday.
After last week's analysis of the UK's occupational property market, Bull has moved on to Part 2 of his pitch to the Singaporean investors he's flying out this weekend to meet.
In his pitch, he discusses the winners of St Bride's top UK Key Cities, the changing age demographics of the UK and the forecasts for Total Returns over the next few years.
His conclusion is, unsurprisingly, that now is the perfect time to invest!
Have a happy Sunday.
Bull is heading back to Singapore next weekend in an attempt to encourage some Singaporean investors to invest in the UK Property Market.
Bear is interested to hear his pitch, and more specifically, what sectors he'll be recommending.
Bull's top picks include; London offices, London retail, South East industrials and a bit of regional PBSA and selective residential too.
This week he delves into the occupational story for those sectors.
Enjoy your Bank Holiday weekend.
The release of Liz Truss' new book has not gone down well with Bear. He still wants her to apologise to all UK homeowners for the higher mortgage rates they have had to stomach following her disastrous mini-Budget in September 2022.
During this week's discussion, Bull and Bear explore the current state of the UK residential mortgage market.
In light of most lenders increasing their rates this week in response to market uncertainty, Bull and Bear assess what impact this may have on UK house buying and letting activity.
Enjoy your Sunday.
With tensions in the Middle East continuing to escalate, Bear is concerned that another regional conflict could have a negative impact on the UK economy, and the green shoots of recovery in the property market.
Bull agrees that the geo-political risks to the economy are increasing, but believes that the UK economic data still offers enough encouragement for the Bank of England to start cutting interest rates later this year.
Enjoy your Sunday.
For the first time since 2012 when the St Bride's Annual World Cities Index was launched, London has lost its crown and slipped into second place.
The Big Apple has claimed top spot this year, and Singapore has picked up the bronze medal. Copenhagen are new entrants into the top twenty.
Bull and Bear are comforted, but rather surprised, that the UK has somehow retained its silver medal position in the Environmentally-Friendly Country Index.
But are miserable, unhappy and gloomy that we have only just scraped into the top twenty happiest countries. Boohoo!
Have a happy Sunday.
As Bull limbers up to participate in today's London Landmarks Half Marathon wearing a costume of 10 Downing Street dressed as Boris Johnson (yes, you read that correctly!), Bull and Bear discuss the current health of the London office market.
JLL reported that there was a rebound in office leasing activity in Q4 2023 with 3.4 million sq. ft. transacted, showing a significant 55% improvement compared to Q3 and marking the highest Q4 volumes since 2010.
Prime office rents increased across all Central London main markets in Q4 2023, with the prime West End office rent increasing to £140 per sq. ft.
Only £6.5bn of Central London office investments were traded last year but there are indications that private equity firms are now returning to the market. Their return usually signals that pricing is bottoming out and that deal volumes will pick up.
Enjoy your Sunday.
