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Jonathan’s Market Round Up

January 26, 2010Article by Ray Withers

OK guys this is my first foray into the insightful world of the PF blog, brace yourself for regular – and not so regular – postings on the hot topics doing the rounds in the industry’s press.

I wanted to open my account by providing readers with an intuitive review of the 2010 market forecasts published earlier this month by the industry’s top dogs.  To do so however would be an injustice to many exciting headlines that have hit the property press recently – the hive of activity in this week’s press alone has made it impossible – and for this reason I have attempted to abridge the month’s news to date in a very short but sweet market commentary with the view of more news and reviews to follow!

In short, the headline grabbing news to hit the press has centred – in my mind – on a few distinct areas, notably, tribunals, economics, deals and of course, more deals!

The Wheeler employment tribunal has dominated the property press over the last week as the trial comes to fruition, OK this isn’t really essential news, and it hasn’t really dominated so to speak, but it is interesting nevertheless for the obvious reasons and given the magnitude of the accusations that have already been disclosed; I’ll aim to keep you posted with a blow by blow account, or at least the impending result either way!

Away from the tribulations of Mr Wheeler’s case against his former employers, a key theme of this months property press has been the resurgence in commercial property returns on the back of strong a 2009 Q3 performance.  The IPD monthly index depicts a 2.2% return for 2009 assisted predominately by the witnessed increases in capital growth – fuelled by foreign investment – and the moderation of reductions in rent.  Although this is clearly a positive for the market, the real question is whether this momentum has continued into 2010?

Initial research points to a number of deals of note this month, leading the category is the impending purchase of a commercial unit in Mayfair at a benchmark prime yield of 4.22% as reported in the property press late last week.  While both DTZ and Cushman & Wakefield have too reported sound investment deals yielding returns in and around the 5.5% mark.  Plainly, this has to be a sign of an upward market!

Finally, a special mention to Drivers Jonas, soon to be DJD after the service provider confirmed its merger with the accountancy heavy-weight Deloitte’s.  Arguably the most significant merger over the last decade, undoubtedly this represents an exciting time for not only DJ and Deloitte’s, but the property services industry as a whole!  This is clearly not a merger on the back poor performance, but rather a deal that has principally been agreed to raise the bar in terms of client services.  Over the coming months it will certainly be interesting to see how the rest of the industry react, indeed while going to press there have been murmurings of a further property partnership to be concluded this week; more info will follow …

If this early investment momentum is anything to go by, and provided it can be sustained, the months ahead are certainly going to be fast paced!  Having said this we are eagerly awaiting tomorrow’s release of key economic data which will, without a doubt, very much shape the property and eco-political landscape of the year ahead.

… watch this space.

Jonathan

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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