UK Economic and Real Estate Briefing – August 2021
The economic recovery is strengthening, with many aspects of the economy returning to, if not well above, pre-pandemic levels, in particular retail sales, the housing market and the labour market.
The rebound in investment activity also continues. Consistently-strong investor demand has pushed MSCI's All Property Net Initial Yield to an all-time low.
- UK GDP growth came in slightly lower than anticipated in Q2. Latest figures reveal the UK economy grew by 4.8% q-o-q, compared with the expected growth of 5.7%.
- This post-pandemic rebound bodes well for a return to the average annual investment volume levels next year.
- Yield compression is now in full swing across the UK real estate market. Nowhere is this more evident than the logistics sector. The latest MSCI quarterly index shows average industrial net initial yields are now at 3.9%, dipping below 4% for the first time on record.