EDITOR’S COMMENT I’ve been talking to a lot of people about the market this week. And post-election and pre-MIPIM, there is a lot of chat about the market being back.
There is no denying that there continues to be plenty of money sloshing around. That is evidenced in the number of viewings there are for the few assets officially up for sale – numbers topping 50 per asset, according to my conversations. So it is no wonder that we are seeing a lot of property that failed to sell in the years after the referendum vote and in the months where there was a fear that a Corbyn-led Labour party might make its way into Number 10, start to be talked about as coming back to the market.
Whether they do and at what price they sell, of course, remains to be seen.
On the face of it, the UK looks like a great place to invest at the moment. (A new EG video, in partnership with Fiera Real Estate, highlights where some of those opportunities lie; have a watch at videos.egi.co.uk).
There is rental growth (outside of retail), the yield profile is relatively sensible compared with continental Europe. We also seemingly have some stability back politically, and aside from storms Ciara and Dennis, are not being ravaged by devastating environmental conditions or the spread of disease. Why wouldn’t you want to put your money here?
Too chatty?
But – and this may well just be the cynical journalist in me – doesn’t it feel just a touch too chatty at the moment? It’s a great market if you are one of the few official sellers in it – just ask Helical – but if you are trying to buy, you have to bid aggressively if you want to get your offer anywhere near the top of the deck, and sooner or later (and this is me being cynical Sam again) someone is going to get too aggressive – and we all know what happens then. This market is cyclical, after all. And ordinarily it has run like clockwork with its boom and busts.
In these very pages we’ve cited data that dates back to the 1800s (so pretty robust) which shows that recognisable recessions occur every 18 years in the UK and US. That data predicts that this year will be the proper boom in the boom and bust cycle, with looser monetary policy and continuing low interest rates driving spending, with the big bust coming in 2026.
Time will tell as they say, but buyer beware is probably a decent phrase to utilise once in a while over these next few months.
What we do know is that there is going to be a lot of running around between now and MIPIM, and that it is going to be a whole lot of fun, a whole lot of hard work and very, very tiring.
The importance of switching off
Which brings me neatly to my final thought for this leader. And a thank you to KPMG’s Andy Pyle for sharing the lessons he learnt from switching off from the high profile job he holds. Andy is back from a six-week sabbatical, during which he completely switched off his emails, decluttered his Twitter feed of all the noise and spent some time just being himself.
It’s a vital read, especially in these times of high pressure. We all need to learn to switch off now and then. We all need to realise that the world keeps turning if we check out for a little bit. And we all need to learn – especially those of us in leadership positions – that our teams can do just fine without us there all the time. Some might even suggest that they do better.
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
