David Allen, Shortland Penn + Moore director, recently attended a seminar in London where three eminent speakers reviewed the Outlook for UK Property for the forthcoming year.
He said: “All of them put it in the context of global cities and, as such, the London focus was very heavy indeed.
“Ignoring perhaps the most amusing but relevant comment from the economist that he had been right for the wrong reasons and wrong for the right reasons and perhaps this year he might be right for the right reasons, perhaps the most interesting aspects were that RPI inflation could be four per cent plus and CPI 3.5 per cent plus this year and, in real terms, wages would fall.
“The household saving rate was also falling down to six per cent so there is little room to prop up consumer spending through that. Growth would therefore decline to somewhere nearer to 1.2 per cent and there is still an enormous balance of payments deficit.
“In terms of property, the emphasis on global cities was very strong. It was also made clear that obsolescence was present in a large part of the property stock (not just in the UK) hence that particular institution’s desire to develop to hold.
“Also diversification into alternative sectors such as hotels, healthcare, data centres and the like where there was strong occupational needs was also mentioned heavily.
“They also recognised the big change in both the behaviours of office tenants and retailing tenants.
“Property, on the whole, emerged quite well as most of the other markets were even more overpriced.”
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