The Market Update

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News article

The Market Update

March 2016

investment market

This quarter we concentrate on investment sales and trends. Much has been made of the slowing of the investment market, but with London agents are still reporting that the market is overheating, many may be confused as to what yields look like for the various property types. Here we look at the core Fisher German geographic area and the last quarter of 2015 with a comparison to the same quarter in 2014.


Industrial and Distribution Sector       Quarter 4 2014       Quarter 4 2015 
Number of Transactions 108 81
Total GBP Volume £2,315,839,333 £443,926,000
Average Price £23,874,632   £8,071,382
Net Initial Yield  7.98% 8.18%
     
Office Sector Quarter 4 2014 Quarter 4 2015
Number of Transactions 98 90
Total GBP Volume £2,010,852,545  £1,128,904,450
Average Price £25,453,830 £16,849,320
Net Initial Yield 8.77% 7.75%
     
Retail Sector Quarter 4 2014  Quarter 4 2015
Number of Transactions 197 195
Total GBP Volume £1,220,169,833          £1,392,206,670
Average Price £7,578,695 £9,099,390
Net Initial Yield 7.78% 7.62%

Data produced from Co-Star Suite. Average Prices are based on weighted averages

This research generates some very interesting numbers, for instance there was a 22% fall in the sales volume allied to the Industrial and Distribution sector, but only a reduction of 33% in the actual number of transactions.

The office sector also saw some dramatic falls, a 78% fall in sales volume but only a 9% fall in the number of transactions.

The only sector that seems to have improved is the retail sector, which perhaps supports the comments that this market was slower to start to recover from the recession.

There may be other factors at work here too. Is the fall in the values and sales volume a result of more activity in the regions, (where values tend to be lower) and less focused on the south? Well, these figures are generated from the Fisher German heartland and exclude London and the south east.

What is clear is that there is yield pressure in all sectors with lower yields now than compared to 12 months ago.

For further information, please contact Kevin Benson email here or Rob Haigh email here


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