With the summer holidays drawing to a close, it’s time to sharpen our pencils and return to school by getting up to speed on the main issues and opportunities facing our industry.
Here are my top 10 considerations over the coming months:
1) Scot free?
There’s plenty of debate about the likely impact of the imminent Scottish Referendum. While it’s not my place to endorse one outcome over the other, whichever way the vote goes there will be an effect on Scottish real estate and the economy more generally: a split will fundamentally change things while staying together will place a new-found spotlight on the country.
2) Party fever
September sees each political party host their conferences. All eyes are on hints or promises made that might start to build a picture of party manifestos ahead of next year’s general election.
3) Prime time
The prime central residential market may be flat and it’s easy to think of potential downward movement, but global uncertainty may well encourage further flight to safety, particularly to the UK’s capital. This may of course have to be balanced by any threat to security on our shores, such as those highlighted by the prime minister recently.
4) Bubble trouble
Some say commercial property in central London could be heading for a bubble. But the demand from underlying tenants may well outstrip the supply, which potentially could delay the downward fall in values.
5) Minding the gap
There is a perception that regional and fringe London asset values are increasing but, as I have previously predicted in this column, there is likely to be some way to go in terms of the gap between prime and secondary assets. Investors need to be selective in their stock-picking and focus on availability imbalances to maximise the potential opportunities in this area.
6) Retail therapy
The retail landscape will continue to change with an ongoing focus on the internet and all that it entails. The face of distribution is undoubtedly going to continue to evolve as the last mile conundrum is solved for consumers. As the retail sector shows improvements, many retailers are keen to continue multichannel sales and no doubt this will lead to a change in the high street retail landscape as well.
7) Leisure time
From restaurants to cinemas, the leisure industry will likely grow as the UK economy continues to improve. This will undoubtedly create opportunities in relation to leisure or converting parts of retail to leisure.
8) Grey market
By definition a longer-term point but there is no getting away from our aging population, which will only maintain the demand for care homes and other related assets.
9) Home improvements
Residential still shows supply/demand imbalances in parts of the UK, especially the South East, creating opportunities for developers and investors. This could stem from the more traditional space of housebuilders to the more opportunistic debt space or private rented sector.
10) Cheaper debt
Helpful to many, commercial debt terms are likely to continue to improve as the economy advances, but the fall in margins may be counteracted by a rise in interest rates.
Manish Chande is senior partner at Clearbell Capital
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