M&G Real Estate’s in-house research team produces regular updates on our key markets, alongside more in-depth pieces on major trends affecting global property today.
Latest real estate market outlooks
Business sentiment in the eurozone has remained stable since the UK’s referendum vote, with the immediate impact largely confined to the UK economy. Whilst the longer-term implications remain unclear and may yet be far reaching, we anticipate investors to remain focused on core prime European markets. Property market yields have continued to trend down in Europe and this combined with very low bond yields supports the return outlook and the investment case for investors in the region.
In the weeks following the UK referendum vote to leave the European Union, the initial impact of the result has been uncertainty, causing falls in confidence. A slowdown in economic growth is likely as businesses and consumers wait for clarity over what form the UK’s new relationship with Europe will take and also, more in the near term, over the domestic political environment.
Asia Pacific is on track to deliver some of the highest total returns globally in 2016 – averaging nearly 10% across the region. Following the UK’s vote to leave the European Union, and the expected period of market volatility in that region as a result, appetite for Asia may pick up even further thanks to its relatively more attractive GDP growth and prospective returns.
Read our analysis of which segments of the UK real estate market may face the greatest short-term challenges, and of the long-term investment opportunities which may arise from any volatility.
Investors and occupiers are increasingly looking beyond London for, respectively, higher returns and lower rents. The big question is whether the regional cities have sufficiently large and diverse economies to present an attractive long-term investment proposition. We have developed a proprietary index of vital signs to measure the heartbeat of 13 of the UK’s biggest cities and assess the strength of the opportunities on offer.
Looking further afield for opportunities reveals edge of Central Business Districts as offering attractive fundamentals and value.
The recovery in Europe continues to boost employment and the office market. Tight supply has driven rental growth, supporting capital values. Attractive pricing for investors can be found at edge of Central Business District markets, whilst offering affordability for occupiers.