Country Report Great Britain Q1-2021
“Despite the cautious strategy, we enjoyed a profitable first quarter.”

Dear readers,

“During the coronavirus pandemic there was a great deal of speculation on how the increase in people working from home would impact the office market, in addition to the challenges posed by digitalisation. According to a year-on-year comparison for the Greater London office market, investment volume in March 2021 fell by 50 % compared to March 2020. Given that deals require three to six months of lead-up time, it is clear that very few investment plans were implemented in September and October last year. This is most likely due to the second lockdown implemented in the autumn following the easing of restrictions in the summer. Investment activity among British investors rose during the reporting period, while the otherwise significantly higher share of foreign investment activities declined substantially. We keep watching, but continue to harbour significant interest in modern and sustainable concepts. Despite the cautious strategy, we enjoyed a profitable first quarter.” 


Your Markus Nitsche

Contact

Mr Markus Nitsche
Managing Director Great Britain

Phone: +44 20 742 947 00
E-mail: Markus.Nitsche@deutschehypo.com

REECOX UK achieves the highest rate of growth in Europe, at 9.6 %

British real estate market activity continued on its recovery course at the start of the year and reported the highest rate of growth among the European markets monitored as part of REECOX. By the end of the first quarter, the index had almost breached the 200-point mark – the highest it has been since April 2019. The upward trend was fuelled by the positive performance in March (+7.5 %).

Real estate shares remain strong

Performance on the stock markets is a major factor in the positive overall development. The benchmark index, the FTSE 100, recorded a rise of 3.9 % compared to the fourth quarter of 2020. The index closed the quarter at 6,714 points. The FTSE EPRA/NAREIT UK real estate share index also performed extremely well. Despite a slight decline at the beginning of 2021 (-0.3 %), increases in both February (+4.1 %) and March (+4.9 %) pushed the index to 1,202 points at the close of the first quarter. This equates to a 9.0 % increase compared to the previous quarter. Business sentiment as measured by the Economic Sentiment Indicator (ESI) also developed extremely positively, rising by 9.0 % to 91.9 points.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2021

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-2001/2102/21Q1-21Delta (%)
Q4-20 / Q1-21
DE
upup
do
upup
eq
up
311.0
303.1
309.4
328.9
5.8
GB
up
up
upup
eq
upup
185.3
184.0
188.8
203.0
9.6
PL
do
up
upup
eq
upup
172.7
174.9
178.4
181.7
5.2
NL
upup
up
upup
eq
up
178.5
181.4
181.2
188.2
5.4
FR
upup
eq
upup
eq
upup
219.8
219.0
223.0
229.0
4.2
ES
up
up
upup
eq
upup
169.6
171.4
170.6
175.1
3.2