Business News Round Up (29/07/2021)
UK institutional investors show concern over economy coming out of pandemic
Almost forty per cent of UK institutional investors are optimistic about the economy as the country emerges from the pandemic, according to the latest Institutional Investor Compass Survey from MFS Investment Management. The survey found that almost half of respondents (48 per cent) are confident about achieving their three- to-five-year goals but are less certain (24 per cent) of meeting their shorter-term objectives, post-pandemic. Adding to this mixed sentiment, the survey showed that more than 57 per cent of institutional investors agree some industries will not recover, with more than 47 per cent agreeing that Coviod-19 has created investment opportunities and 35 per cent agreeing that markets do not fully reflect the long-term economic impact of the pandemic. When questioned about their top concerns over the next 12 months, 68 per cent of UK institutional investors expressed their fear of a global recession and 52 per cent are worried about the potential formation of market asset bubbles. Unsurprisingly, 55 per cent highlighted high unemployment and 48 per cent growing government deficits.
Glasgow and Edinburgh city centre markets see highest take-up in over 18 months
Total office space take-up during the second quarter in Glasgow city centre was 142,821 sq ft – down 13% on the 10-year average, but the highest since the beginning of 2020. Meanwhile, Edinburgh city centre saw the largest number of deals since the fourth quarter of 2018, with take-up amounting to 137,705 sq ft – only marginally down on the 10-year average by 4%. Property advisor Avison Young’s latest analysis showed that flexible workspace deals in Glasgow are returning to the regional markets and accounted for the largest deal of the quarter – 35,787 sq ft to Instant Managed Offices, courtesy of DWP at 200 Renfield Street. BNP Paribas has taken the 20,700 sq ft first floor of 177 Bothwell Street at a headline rent of £34.50 per sq ft, while the top floor of Cadworks is under offer and 20,000 sq ft is under offer at 2 Atlantic Square. Both deals are expected to conclude in the third quarter. There remains a healthy level of new requirements, according to Avison Young, with the Cabinet Office looking for between 20,000 sq ft and 40,000 sq ft, engineering company Aecom requiring 25,000 sq ft and power supplier Aggreko looking for 15,000 sq ft.
https://www.insider.co.uk/news/glasgow-edinburgh-city-centre-markets-24633712
Brexit: UK services are losing out to EU rivals – but Asia could be big winner
Seven months after Britain’s exit from the EU, the chilly effects on UK trade are being felt. Total exports of UK goods and services were down by 13% (£36 billion) and imports down 22% (£66 billion) for January to May 2021 compared to the same period in 2019, according to the Office for National Statistics (ONS). In a separate new ONS report into UK services, exports and imports fell 12% and 24% in the first quarter of 2021 compared to the same period in 2019. To some extent this is due to the pandemic, but the decline with EU countries was more severe (exports down 15% and imports by 39%), which suggests Brexit was relevant too. The difference between services exports to EU and non-EU countries was particularly marked in sectors like construction (-43% vs +24%), maintenance and repair (-62% vs +11%), and manufacturing services (-40% vs -12%).
Manchester office recovery a slow burn – Liverpool’s Grade A supply hits record lows
New data from real estate advisor Avison Young show Manchester’s office market has continued to improve since the easing of lockdown restrictions, while the Liverpool market is experiencing historically low levels of Grade A space. In Manchester, figures show a slow, but steady, recovery from a year that impacted the region like no other, as reported in the latest Big Nine report which analyses the office trends in the largest cities outside of London, including Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, and Newcastle. The report offers a full evaluation of the region’s office take-up and investment deals in the second quarter of 2021. Although still below its 10-year average, the Manchester market has seen a take-up of 220,183 sq ft and 153,355 sq ft in the city centre and out-of-town markets, respectively. Despite this lower than average performance, the Manchester market received the second quarter highest investment figures out of all the cities featured in the Big Nine, as well as the highest 12-month quarterly average following significant deals such Number 8 First Street and the second phase of Muse Developments’ New Victoria scheme.