Tag Archives: middle-east
Manchester becomes key focus for commercial property investment
Office transactions in the UK’s third largest city increased by 8% in the first half of 2016 compared to the same period last year with Manchester becoming a key focus for commercial property investors. Transaction volumes in Manchester’s office investment market totalled £304 million in the first six months of the year, some 3% higher than the five year first half average of £295 million, according to international real estate advisor Savills. The firm’s latest Manchester Office Market Report says that overseas investors showed particularly strong demand for the city’s office assets, accounting for 70% of all transactions with deals worth £212 million. This is well above the long term first half average of 37%, according to Savills. Examples include the £115 million acquisition of 3 and 4 Piccadilly Place by US based Ares Management and the £85 million purchase of XYZ in Spinningfields by Germany’s Union Investment Real Estate. ‘The outcome of the European Union referendum is now sinking in and some office transactions will be inevitably be delayed or renegotiated as investors take stock. However, we expect the increased depth of overseas interest in Manchester to help stabilise the market as foreign buyers take advantage of the weaker sterling and reduced competition,’ said Peter Mallinder, investment director at Savills. Despite the lack of trophy letting deals recorded in the first half of 2016, Savills reports that office take up reached 415,257 square feet, in line with Manchester’s long term average and the third quarter started positively with law firm Freshfields committing to around 80,000 square feet at One New Bailey. A number of other key leasing deals including to Swinton Insurance at 101 Embankment are expected to complete in the third quarter, with take up for the full year reaching one million square feet. This follows a total of 1.3 million square feet in 2015. Savills highlights the diverse nature of Manchester’s office occupier base, which does not overly rely on the public sector or banking and finance, as one its key strengths. The TMT sector has shown particular growth in Manchester and accounted for 21% of all take up in the first half of 2016 with deals totalling 85,307 square feet compared to 17% of deals in the full year of 2015. In terms of size, more than 51% of office space let in the first half of the year was through deals below 5,000 square feet compared to a long term average of 32%, driven in part by the abundance of TMT firms and start-ups moving to the city. ‘Office take up in Manchester has been significantly in excess of the long term average in recent years, which puts the city in a good position going forward and activity levels since the referendum result are encouraging,’ said Richard Lowe, office agency director at Savills. He added that headline Grade A rents have risen from £28.50 per square foot in… Continue reading
Low inventory levels in many parts of the US caused home sales to fall in July
Existing home sales in the United States lost momentum in July and decreased year on year for the first time since November 2015 with a fall of 3.2%, the latest index data shows. Total existing home sales fell to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June and are now 1.6% below a year, only the second time in the last 21 months this has happened. The data from the National Association of Realtors (NAR) also shows that the median existing home price for all housing types increased by 5.3% in July to $244,100, the 53rd consecutive month of year on year gains. Lawrence Yun, NAR chief economist, said that existing sales fell off track in July after steadily climbing the last four months. ‘Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,’ he explained. He pointed out that real estate agents are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows. ‘Furthermore, with new condo construction barely budging and currently making up only a small sliver of multi-family construction, sales suffered last month as condo buyers faced even stiffer supply constraints than those looking to purchase a single family home,’ he added. The report also shows that total housing inventory at the end of July inched 0.9% higher to 2.13 million existing homes available for sale, but is still 5.8% lower than a year ago and has now declined year on year for 14 months in a row. Unsold inventory is at a 4.7 month supply at the current sales pace, which is up from 4.5 months in June. ‘Although home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring, the housing market is undershooting its full potential because of inadequate existing inventory combined with new home construction failing to catch up with underlying demand,’ said Yun. ‘As a result, sales in all regions are now flat or below a year ago and price growth isn’t slowing to a healthier and sustainable pace,’ he added. The share of first time buyers was 32% in July which is below last month when it was 33% but up from 28% a year ago. First time buyers represented 30% of sales in all of 2015. All-cash sales were 21% of transactions in July, down from 22% in June, 23% a year ago and the lowest share since November 2009 when it was 19%. Individual investors, who account for many cash sales, purchased 11% of homes in July, unchanged from June and down from 13% a year ago while 70% of investors paid in cash in July. Coming in at the… Continue reading
New home building in UK up 6% year on year but below target
The number of newly built homes in the UK has increased 6% in the past year, according to the latest house building data from the government. Some 139,030 new homes were completed in the year to June and have continued to build gradually over the last two years, according to the figures from the Department of Local Government and Communities. The data also shows that more than 144,280 homes were started in the year to June 2016 but the figures are still below the current target of 220,000 that are needed to meet the housing crisis. Communities Secretary Sajid Javid admitted that more needs to be done. ‘We’ve got the country building again with more new homes started and built than this time last year. This is real progress but there is much more to do. That’s why we are going further and increasing our investment in house building to ensure many more people can benefit,’ he explained. A breakdown of the figures show strong regional growth in London, Swindon and Wakefield, which are all experiencing high levels of completions. Delivery in London saw 24% more homes being built in the year to June 2016 than the previous year with local authorities in Greenwich and Waltham Forest seeing completions increase by 126% and 103% respectively over the same period while in Swindon and Wakefield completions were up 104% and 41% respectively. Figures published last year show that the total number of new homes across the country rose by 25% in 2014 to 2015, when taking in to account all homes, including new builds, houses that have been converted into flats and buildings whose use has been changed to residential. Javid pointed out that the government is committed to building the homes the country needs and investing £8 billion to build 400,000 more affordable homes to rent and buy. He also pointed out that the new Housing and Planning Act will help deliver the ambition to build a million more homes by ensuring councils continue to play a key role in delivery, and through new measures that will allow them to deliver more homes more swiftly. On a quarterly basis, house building starts in England were estimated at 36,400 in the latest quarter, a 2% increase compared to the previous three months and 6% up on a year earlier while completions were estimated at 34,920, some 7% higher than the previous quarter but 2% lower than a year ago. Annual housing starts totalled 144,280 in the year to June 2016, up by 2% compared with the year to June 2015. During the same period, completions totalled 139,030, an increase of 6% compared with last year. Private enterprise housing starts were 4% higher in the June quarter 2016 than the previous quarter whereas completions were 3% higher. Starts by housing associations were 6% lower compared to the last quarter and completions 29% higher. All starts are now 112% above the trough in the March quarter of… Continue reading
