Investment News

U.K. House Prices Surged in January as Few Homes Come to Market

by International Commercial Investment on February 1, 2018

Source: Bloomberg

U.K. house prices rose in January as a shortage of properties coming up for sale offset an underlying slowdown in the market.

Values increased 0.6 percent from December, lifting the annual gain at 3.2 percent, Nationwide Building Society said on Thursday. While that’s more than the December rate of 2.6 percent — and the fastest since March — it’s still well below the pace of recent years.

The property market has been hurt by slower economic growth and a squeeze on consumers’ incomes since the referendum to leave the European Union in 2016. The Royal Institution of Chartered Surveyors said last month that activity remains subdued, and mortgage approvals fell to a three-year low last month.

“The acceleration in annual house price growth is a little surprising,” said Robert Gardner, chief economist at Nationwide. “The lack of supply is likely to be the key factor providing support to house prices.”

The average house price in the country rose to 211,756 pounds ($300,000) from 211,156, the report showed.

read more
International Commercial InvestmentU.K. House Prices Surged in January as Few Homes Come to Market

London Beats New York Among Foreign Investors in Real Estate

by International Commercial Investment on January 8, 2018

Source: Bloomberg

New York City took a double hit in an annual survey of real estate investors, which saw London overtake it in first place globally and Los Angeles tie it for top U.S. city.

The annual survey of the Association of Foreign Investors in Real Estate asks its members, who are estimated to have more than $2 trillion in real estate assets under management, to rank markets by various measures, such as stability and opportunity for capital appreciation. This year’s poll, the 26th, also saw pricey San Francisco, which had been one of the top five global cities since 2011, fall to 11th place, and Washington, D.C., skid to 25th from 15th place last year, part of a long slide.

Foreign investors are less worried about the impact of Britain’s exit from the European Union than they were a year ago, association Chairman Edward M. Casal said in a statement, referring to London’s jump from third to first place — although Britain did fall from third to fifth among countries offering the best opportunity for appreciation.

The U.S. was first for planned real estate investment in 2018, followed by the U.K., Germany, Canada and France. And New York is no slouch, as the chart shows.

New York’s tie with Los Angeles was a surprise, association Chief Executive Officer Jim Fetgatter said. It was L.A.’s first time in the top spot for U.S. cities, while New York had been named the top U.S. city for the last seven years. Los Angeles can thank its mighty port for the honor.

“With the growth of online shopping, foreign investors continue to rank industrial/logistics properties as their No. 1 investment opportunity,” Fetgatter said in the statement.

In an interview, he said that the recent U.S. tax overhaul is “not necessarily a boon” to real estate, preserving much of the status quo for the industry, but is generally a positive development. Investors will benefit from the far lower corporate tax rate, which will create jobs and increase income, he predicted.

The survey was conducted in the fourth quarter of last year by the James A. Graaskamp Center for Real Estate, at the Wisconsin School of Business.

read more
International Commercial InvestmentLondon Beats New York Among Foreign Investors in Real Estate

Value of UK’s housing stock soars past £6tn

by International Commercial Investment on November 28, 2017

Source: The Guardian

The total value of all the houses in the UK has passed the £6tn mark for the first time, according to research by Halifax which also highlights the vast concentration of property wealth in London and the south-east.

The value of homes in London is now more than all the houses in Scotland, Wales and the north of England combined. The research also reveals how property values in the south have escalated since the financial crash of 2007-08, despite incomes remaining relatively flat.

In 2007 Halifax estimated that the UK’s housing stock was worth a total of £4,077bn, but over the past 10 years the figure has risen to £6,015bn.

To put the £6tn figure into context, it is nearly four times the size of the UK’s national debt, which is currently just over £1.8tn, and three times our total national output in 2016 (around £2tn). But even if every house in Britain was sold, the money raised would pay off less than half of the US’s national debt.

The big rises in the value of the UK’s housing stock have mostly taken place in the south. In 2007, the value of housing in the north-east was estimated at £114bn, but today it stands at £136bn – an increase of £22bn.

But in London, houses have jumped in value from £718bn in 2007 to £1,338bn today, a gain of £620bn. Over the same period the value of properties in Northern Ireland actually fell.

In total, 68% of private property wealth, amounting to £3.8tn, is concentrated in the south, up from 62% in 2007.

The stock of privately owned homes in Britain also increased in number from 21.5m to 23.4m.

Among the biggest gainers of property wealth in the south have been landlords and second home owners. Halifax said that while the average rate of owner-occupation in the UK was 63%, it stands at just 48% in London.

The vast majority of housing wealth is owned by the over-55s. Halifax estimated that under 35-year-olds own just 3.3% of the UK’s net property wealth, while the over-55s hold 63.3%.

Russell Galley, managing director at Halifax, said: “The value of housing stock has grown by close to £2tn in the past decade, and with the equity rich regions of London and the south-east largely responsible, it highlights a considerable regional imbalance in the distribution of housing wealth.

“Within the capital there is also a mix of fortunes. While more than a fifth of total property wealth is in London, lower levels of owner-occupation reflect a major barrier to the property ladder with a far greater number of people renting where house prices are at their highest.”

The property market has bestowed much higher levels of housing equity – the difference between the value of a home and the outstanding mortgage – on people living in the south. Halifax estimated that the average homeowner in London has net equity worth £360,193, compared to £134,273 in the north-west of England.

read more
International Commercial InvestmentValue of UK’s housing stock soars past £6tn

London’s airports will be ‘completely full’ in 20 years

by International Commercial Investment on October 25, 2017

Source: Financial Times

Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/96b3acd8-b8de-11e7-9bfb-4a9c83ffa852

London’s five airports will all be “completely full” by the mid-2030s, transport secretary Chris Grayling warned on Tuesday as the government published updated aviation demand forecasts.

Mr Grayling said the forecasts showed the pressing need to go ahead with Heathrow’s third runway, which would give “the greatest choice” in destinations and frequent long-haul routes.

The minister was speaking as he launched a consultation on the revised draft “Airports National Policy Statement”, which includes an updated air-quality plan suggesting the runway could go ahead without the UK breaching pollution obligations.

Mr Grayling also indicated the government would look beyond the Heathrow project to deliver an “ambitious long-term vision for the sector” to deliver economic growth for the whole country.

Heathrow has now effectively reached full capacity, while Gatwick is “operating at capacity at peak times”, according to the documents.

All of London’s airports apart from Stansted will be full by the mid-2020s, according to the official forecasts: Heathrow, Gatwick, Luton and London City.

There has been a combined increase of 13m passengers over the last five years at Stansted, London City and Luton combined.

John Stewart, chair of the HACAN anti-Heathrow group, called the forecasts “startling”, saying: “It is clear that demand over the next 15 years will come from London and the South East. This will add to the pressure to build a new runway somewhere in the region.”

Members of the public have until December 19 to respond to the draft national policy statement.

That will then pave the way for a final NPS which will be scrutinised by the transport select committee and then must pass a vote in the House of Commons before the Heathrow third runway can go ahead. The airport’s management wants to begin construction in early 2021 and complete the scheme by the end of 2025.

The vote is expected before next summer’s Parliamentary recess, and the government is expected to win with the help of the Scottish National party.

Alistair Watson, partner at law firm Taylor Wessing, said the process pointed towards a possible delay for the third runway.

Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/96b3acd8-b8de-11e7-9bfb-4a9c83ffa852

“If you then put into the mix the ongoing and successful litigation to the UK Air Quality Plan and the chance for objector groups and pro-Gatwick supporters (including the Mayor of London) to use this consultation period to create more delay, an adopted NPS via Parliament in spring 2018 looks romantic,” he said. “An adopted NPS being challenged in the high court in Summer 2018 looks more than realistic.”

But the Department for Transport said the plans were still on time and on schedule.

Heathrow said the consultation was a “key milestone” in the expansion of the airport: “A third runway will ensure Britain’s place in the world as an outward-looking trading nation”.

read more
International Commercial InvestmentLondon’s airports will be ‘completely full’ in 20 years

Business investment in the UK went up in the second quarter

by International Commercial Investment on October 4, 2017

Source: CITY A.M.

Business investment in the UK increased between April and June this year, the latest Office for National Statistics data shows.

Compared to the same period last year, business investment rose 2.5 per cent to £45.6bn, meaning firms bought more non-financial assets like machinery and property than they did last year.

It also edged up on the previous quarter, increasing 0.5 per cent.

This contributed to overall year-on-year growth of 2.4 per cent in the UK’s gross fixed capital formation (GFCF).

On a quarter by quarter basis, GFCF rose 0.6 per cent, with general government investment up 6.1 per cent.

More investment was put into ICT equipment and other machinery and equipment during the period, marking a jump of 8.1 per cent to £13.9bn.

But less investment in transport and buildings dragged the average growth down, while intellectual property products remained flat.

GFCF is now 6.1 per cent above pre-crash levels, and 35.7 per cent above levels seen at the financial crisis.

But business investment annual growth has been slowing since 2014. In 2016 investment actually shrank 0.4 per cent, marking the weakest growth since 2009, though this is a revised figure. Previously published estimates put decline at 1.5 per cent between 2015 and 2016.

read more
International Commercial InvestmentBusiness investment in the UK went up in the second quarter

Spiralling rents mean Britain’s private landlords earn £54 billion a year

by International Commercial Investment on October 4, 2017

Source: Business Insider

Growing rents and a sharp rise in the number of people renting homes means private landlords are earning ever-increasing sums from renters, and deepening a financial division between those who own a home and those who don’t.

Estate agents Savills said landlords earned £54 billion in the year to June, according to a Times report — twice the total amount of interest homeowners paid on their mortgages, who currently benefit from record-low interest rates.

The private rental figure is up by £14 billion in five years, and represents a 35% increase from a 21% rise in the number of homes, Savills said.

The revenue is driven largely by the vast numbers of millennials who cannot afford to buy a property and are forced to pay increasingly expensive rents.

Around 5.3 million UK households are privately rented, of which those aged between 25 and 34 form the largest group at 1.5 million, according to government figures.

The chronic shortage of UK housing is currently an important political issue. Labour leader Jeremy Corbyn last week pledged to introduce rent caps if he becomes prime minister, and Theresa May pledged a further £10 billion for the government’s Help-to-Buy scheme which helps first-time buyers to purchase homes.

Lucian Cook, head of residential research at Savills, told the Times that high rents in London could push graduates away and threaten the city’s competitiveness.

“The risk is that this starts to become a threat to London’s competitiveness to attract young people into the city,” he said.

read more
International Commercial InvestmentSpiralling rents mean Britain’s private landlords earn £54 billion a year

Gatwick Airport £1.15bn boost

by International Commercial Investment on July 29, 2017

Source: The Argus

GATWICK Airport is investing £1.15 billion over the next five years with £240 million planned for 2017/18 alone.

This is part of plans for more growth and improved efficiency while also maintaining its record levels of passenger satisfaction.

This 2017 Capital Investment Programme sets out Gatwick’s investment strategy which continues to improve facilities and transform service.

Since the airport changed ownership in December 2009 Gatwick has invested £1.5 billion.

– reconfiguring stands to facilitate a changing aircraft mix

– building a new hangar in partnership with Boeing

– extending Pier 6 to increase pier service levels well beyond its 95 per cent target

– adding a new domestic arrivals facility in South Terminal

– and continuing to roll out its self-service bag drop product.

The commitment in this Capital Investment Programme will bring Gatwick’s total investment plans, since change of ownership through to 2022, to £2.7 billion.

Gatwick’s construction director Raymond Melee said: “Since coming into independent ownership Gatwick has delivered record growth in passenger numbers and long haul services while also taking passenger satisfaction levels to an all-time high.

“As we plan to grow towards 50 million passengers per annum, we will focus on efficiency and service so that our passengers continue to receive the airport experience they expect, in the most sustainable manner possible.

“We will continue to develop the airport to meet the needs of our airlines and passengers with improvements to the way we operate on the airfield and the service we offer in our terminals.

“These projects will be delivered in a way that will help us realise our ambition to become the UK’s most sustainable airport.

“Regarding future runway expansion, our financable and deliverable scheme for a second runway remains on the table.

“We will deliver a new runway for Britain in addition to or instead of Heathrow, should the government give us its support now or in the future.”

Other new projects include:

– a new arrivals facility including a new baggage reclaim, in South Terminal

– a suite of IT projects supporting core airport functions

– expanding the departures lounge in both terminals

– extra car parking

– improved access to South Terminal for passengers and staff using local buses to travel to and from the airport

– projects to support greater use of electric vehicles, continuing to reduce the airport’s environmental impact.

The Capital Investment Programme is a rolling five-year plan which is published annually. This allows the CIP to be refreshed regularly as market conditions and operational needs change.

Gatwick Airport is the UK’s second largest airport and the most efficient single-runway airport in the world.

It serves more than 228 destinations in 74 countries for 45 million passengers a year on short and long-haul point-to-point services.

read more
International Commercial InvestmentGatwick Airport £1.15bn boost

Commercial property markets back on firm ground after Brexit

by International Commercial Investment on July 3, 2017

Source: The Express

Commercial property is set to continue its recovery one year after the EU referendum result panicked investors who rushed to dump funds targeting the sector.

FTSE 250-listed St Modwen Properties and Great Portland Estates both deliver updates next week amid continuing uncertainty over the impact of Brexit.

Shares in St Modwen, the UK’s largest brownfield property developer, have bounced 45 per cent since its post-referendum dip and Ben Maitland, securities analyst at Beaufort Securities, expects to see healthy growth in net-asset value per share in next Tuesday’s half-year results.

“St Modwen has just sold its stake in the New Covent Garden Market development at Nine Elms Square in Battersea, south-west London, for £190million, which puts it on a sound financial footing,” said Maitland, adding that the land sale significantly reduces the company’s debt and balance sheet risk.

“The outlook for commercial property for industrial, logistics, private rental and student accommodation is good.”

Graham Spooner, investment research analyst at The Share Centre, said St Modwen is a buy as its debt has been reduced and the shares trade at a large discount to net-asset value.

Great Portland Estates will publish a trading update after May’s full-year results showed a pre-tax loss of £140.2million, with analysts forecasting profits of £58.2million in 2018 amid market resilience.

Hargreaves Lansdown senior analyst Laith Khalaf said it is now a year since open-ended commercial property funds were forced to suspend withdrawals after investors withdrew billions in a post-Brexit panic: “The sector has regained its poise as economic data has proved more robust than expected.

“Commercial property remains sensitive to a UK slowdown. London property is particularly vulnerable as the capital relies so heavily on financial services, which are considered a flight risk if Brexit talks go badly.”

read more
International Commercial InvestmentCommercial property markets back on firm ground after Brexit