M&G Real Estate’s in-house research team produces regular updates on our key markets, alongside more in-depth pieces on major trends affecting global property today.
At M&G Real Estate, we believe that well-serviced connectivity infrastructures provide strong support for a city’s property fundamentals too. A better understanding of connectivity can help investors to identify relative value opportunities in real estate and future-proof their investments for the long-term, as high density cities are more likely to efficiently service densification.
That’s why we developed the M&G Real Estate European Urban Connectivity Ranking to grade 64 European cities based on their capacity to improve physical and digital urban connectivity in the face of the growing density pressures that face Europe’s cities today. Find out how connected the city you invest in is by downloading our report and watching our video.
Latest real estate market outlooks
Underpinned by improving demand fundamentals, we expect the European property market to continue delivering strong investment returns going forward.
Eurozone growth continues to gather momentum as political risks have receded. Loose monetary policy and reduced debt costs has encouraged investors to take on more risk and the share of foreign capital targeting Europe has increased.
The office sector saw the strongest rental growth in the year to Q2. Fewer retail markets are recording increased rental growth compared to the start of the European property cycle, while healthy demand continues to drive industrials.
UK economic growth has moderated, but performance potential is supported by long term fundamentals.
Real estate investors are offered a significant risk premium, the yield spread over government bonds. This spread offers a ‘cushion’ against upwards yield pressure should bond yields start rising. Net investment in the UK market is still dominated by overseas buyers and industrials, offices and residential outside central London remain favoured.
Watch the video below to hear from Richard Gwilliam, Head of Property Research, on the drivers behind the UK real estate market.
The outlook for Asia Pacific growth has improved and the region is expected to lead globally, but this largely depends upon China.
Rental growth is anticipated to remain modest for the majority of markets, given most sectors are expected to be in the mid-to-late part of the rental upcycle. Brisbane office market may be best positioned for a cyclical recovery, while offering relatively higher spreads to government bonds. Under allocation to Asia Pacific should continue to fuel demand for the regional property market, despite historically low yields. Amid rising interest rates, investors should look to market-sectors offering a higher yield spread to local bonds.
Our last publication of the European Outlook focused on the outcome of the UK’s referendum on Europe and its potential impact on European real estate markets. In this video and accompanying publication, we continue to consider political uncertainty and its impact on real estate markets as a number of key elections take place in several European countries, notably in France and Germany.
The introduction of the National Living Wage (NLW) in April 2016 and the resetting of business rates in April 2017 have ramifications for the UK retail market. But just what exactly remains unclear, not least in the case of the living wage. This paper aims to offer some early pointers.
With the new Chancellor intent on increasing investment in infrastructure and R&D to help counter the potential negative effects of Brexit, we look at the investment implications for real estate.
Read our analysis of which segments of the UK real estate market may face the greatest short-term challenges, and of the long-term investment opportunities which may arise from any volatility.
Investors and occupiers are increasingly looking beyond London for, respectively, higher returns and lower rents. The big question is whether the regional cities have sufficiently large and diverse economies to present an attractive long-term investment proposition. We have developed a proprietary index of vital signs to measure the heartbeat of 13 of the UK’s biggest cities and assess the strength of the opportunities on offer.