Retail Renaissance

• Despite it being a Bank Holiday weekend, Bull and Bear meet up to discuss the state of the retail market.

• Although retail has long been regarded as the sickly child of property, they discover that it’s not all doom and gloom. For example:

• The March / Q1 2025 retail figures from the ONS were far better than the forecasts.

• Retailer distress is currently at historic lows and vacancy rates are broadly stable.

• Numerous occupiers have expansion plans this year and rents are growing in various locations.

• Institutional capital is active again in all retail subsectors.

• High street yields have started to harden on the back of strengthening investor demand.

• The sector is expected to retain its crown as the top performing commercial real estate asset class in 2025.

• However, the sector now faces a raft of new pressures through the ‘triple whammy’ of increased national insurance employer contributions, rising minimum wages and reduced business rates relief. The hope is that these cost pressures won't trigger another set-back.

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Tariffs - Trouble or Turning Point?

• Bear has some concerns over the effect Trump's tariffs might have on the UK property market.

• He thinks that weak economic growth will stunt real estate investment and the additional costs occupiers will have to burden may hit sentiment around certain sectors.

• Bull, ever the optimist, thinks that these tariffs might inadvertently promote UK property.

• He highlights the predicted interest rates cuts, UK tariffs being lower than elsewhere and investors viewing UK property as a safe haven, as reasons to be positive about investment in UK property.

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A Tale of Two Cities

• Bull is feeling uplifted by the success of the London Landmarks Half Marathon last Sunday which showed off London in its very best light.

• However, Bear is concerned that the capital’s outward success may be masking some deep-seated social challenges, such as homelessness and mental ill-health.

• Together though, they agree that London is, and will remain, the European city of choice for property investment, not least as investors will continue to be drawn to its stability during a time of global economic upheaval.

• Bull and Bear are taking a week off for Easter and will be back on Sunday, 27 April. Like the rest of the world, they have absolutely no idea what craziness will transpire in the meantime!

• Enjoy your Sunday.

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The Global Tirade

• Bull & Bear discuss the impacts and likely fall out from President Trump's tariff gamble.

• Bear gets his knickers in a twist as he watches stock markets around the world take a nosedive.

• Bull, however, senses an opportunity  as US tariffs are only likely to accelerate a process of reindustrialisation from which the UK will benefit.

• UK companies are set to spend £500bn moving their supply chains and manufacturing closer to home, and Britain could reap the benefits as global companies scramble to rightshore their operations in the face of increasing geo-political risks and economic uncertainty.  Risks that will be further exacerbated in a trade war over tariffs.

• Enjoy your Sunday.  

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TransPennine Offices

• Bear has been up north this week, crossing the Pennines from Leeds to Manchester.

• Whilst general sentiment in the regions seemed pretty positive, he's come home feeling a little uneasy about their office markets. 

• Bear has some reservations about the 'fully-fitted' office model and worries the money landlords have to pour into Grade A-minus and Grade B offices could deter investors going forward.

• Bull is quick to remind Bear that occupational sentiment is improving, and whilst there's no doubt many offices will require significant capital expenditure, the soft yields on regional offices represent excellent value for money and it's already starting to entice investors.

• Enjoy your Sunday.

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Treading Water?

• Ahead of The Chancellor's Spring Statement on Wednesday, Bull and Bear meet up to discuss the state of the UK house-building sector.

• Although the UK housing market has seen a robust start to 2025 (and is particularly busy at present as buyers rush to complete deals before a stamp duty saving runs out at the end of the month), the indicators of housebuilding are rather worrying.

• Residential house building decreased for a fifth month in a row in February, despite the Government reiterating that it will meet its house-building target of 1.5 million new homes in England by 2029.

• Most of England’s new homes are built by a small number of large firms. Bull and Bear finish by discussing why SME house builders now only develop 10% of new homes, compared to 39% in 1988.

• Enjoy your Sunday.

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Project London

• Bull & Bear discuss Sadiq Khan's recent appearance at MIPIM 2025 where he showcased his London Investment Prospectus, entitled Opportunity London.

• Always the sceptic, Bear is convinced that the mayor only jetted into Cannes for a quick photo opportunity!

• But once they dig into the prospectus in detail, Bull & Bear are impressed by the scale and ambition of the investment opportunities on offer, with many focused around London's strategic transport hubs including Liverpool Street, Victoria, Waterloo and Euston.

• Above all, Opportunity London demonstrates that the mayor, together with all tiers of London's government, are working hand-in-glove with the property industry to deliver transformational change.  And that should ensure that London continues to attract the lion's share of cross-border capital to make these ambitious redevelopment schemes a reality.

• Enjoy your Sunday.  

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Hurricane Donald

• Over the winter, the UK has suffered five storms … Ashley, Bert, Conall, Darrah and Eowyn. Protocol dictates that the name of the next storm should start with an ‘F’. Except that it won’t.

• To heck with protocols. An executive order has decreed that the next one will go back one letter to ‘D’. As in Donald.

• Brace yourself. In the words of Ronald Reagan … ‘You ain’t seen nothing yet’.

• Looking at the tremendous amount of hot air and gas that is building up on the east coast of America, this one is going to be a complete s***-storm.

• Bull and Bear discuss its worrying implications for investment.

• Enjoy your Sunday.

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Smile for the Square Mile

• Bull & Bear are discussing a market that's rather close to home this week - City of London offices.

• Bull is thrilled to hear that prime rents continue to break records as the occupational market seems increasingly willing to pay top dollar for Grade A stock.

• Bear is quick to remind Bull that there is more to the market than just the top end, and whilst investors/developers are desperate to turn secondary stock into prime Grade A offices, getting the numbers to stack up isn't so easy.

• Regardless, with a fair economic wind, opportunity awaits for those brave enough to take the leap.

• Enjoy your Sunday.

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Prime Residential

• Bull and Bear have not escaped for half-term. The closest they have got to going away is reading Savills’ latest World Cities Prime Residential Research Paper. 

• Despite all the current global political and economic uncertainty, prime global residential property has remained pretty resilient, with average capital value growth of 2.20% in 2024.

• Madrid and Barcelona were the two cities which saw the strongest capital value growth in 2024. However, London saw prime Central London residential values fall.

• In the UK, the expectation is that the abolition of ‘non-doms’ status and the additional 2% stamp duty surcharge will result in further downward pressure on prices in the short term. Savills are expecting prime residential capital values in London to fall a further 4% in 2025.

• Bull and Bear been given next Sunday off, so will be back in a fortnight’s time (2 March).

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New Dawn?

• Whilst Bear worries about the downgrade to the UK's growth forecasts and what-on-earth President Trump is going to do next, Bull is focused on the dawn of a new cycle for the UK property market. 

• Armed with the latest MSCI Quarterly Index results, Bull is convinced that a combination of falling interest rates, low entry prices, good availability of debt, a limited development pipeline, and some positive investor sentiment, will deliver healthy returns.

• Is it time for investors to spring into action or hit the snooze button again for 2025?

• Enjoy your Sunday.  

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Flying High?

• Bull is uncharacteristically bearish about almost everything, although his ears prick up when he learns that the UK has out-performed the French. And he is hoping this good fortune will follow through onto the rugby pitch on Saturday.

• Bear is bullish about almost everything, especially the Government’s support for the expansion of London’s five airports and the re-ignition of growth plans for the Oxford-Cambridge Knowledge Arc.

• Manchester also gets a ‘shout-out’. But above all, both of them are hoping that the Bank of England will play ball on Thursday and cut interest rates.

• Enjoy your Sunday.

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Hybrid Hustle

• Working from home has again been hot in the press this week, so Bull & Bear plan to have another good moan about it.

• Knowing this, Bear Cub decides to join the conversation and offer a more balanced view on the subject.

• Cub convinces Bull & Bear that whether they like it or not, hybrid policies - where employees work 2 or 3 days a week in the office - are here to stay.

• The three protagonists go on to discuss how UK real estate can best place itself to accommodate this trend for the long-term.

• Enjoy your Sunday.

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January Blues

• Bear has a got a terrible case of the January Blues.

• Aside from his favourite football team's woeful run of form, Bear is fed up with the weather and the raft of negative news stories regarding the UK economy. He is also concerned that the recent bond yield spike will harm the relative attractiveness of property as as asset class. 

• Bull tries to reassure him that 2025 will be a year of opportunity for property investors (especially in the value-add space).

• Bull also highlights the popularity and success of the Build to Rent (BTR) sector as an area for optimism. Investment in BTR surpassed £5 billion for the first time in 2024, the fifth consecutive record for investment numbers.

• Enjoy your Sunday.

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