Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Property yields are falling despite the weak demand from property occupiers, according to Cushman & Wakefield Healey & Baker. Driven by poor performance in other investment media, investors’ appetite for good stock has continued to rise and remains ahead of supply, and this has resulted in downward pressure on yields despite the weaker lettings market.

Tim Sketchley, Head of Central London Investment at Cushman & Wakefield Healey & BakerC&W/H&B, said: “Investor demand is currently strongest in the retail sector, followed by industrial and there continues to be demand for well-let offices, even in those areas experiencing a downturn in the occupier market, such as the Thames Valley market.”

But he pointed out that on the occupational side the office market continues to suffer, hit by the double whammy of threats of redundancies and corporate failure. However, Central London office rents were largely stable over the last quarter.

But despite this, Sketchley said yields could go lower still. “There is still a gap between yields and interest rates with research indicating that the investment market can, as such continue to ignore the weaker letting market for some time yet,” he said.

“Overall there is a strong belief that property is now adjusting to the low inflation, low interest world that has led to a re-rating in most other investment sectors. Prices are reacting as much to change in finance and investment markets as to occupier trends and property fundamentals,” Sketchley said.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.