Country Report Great Britain Q3-2022
“Overall, we expect the coming year to be quieter as investors and lenders work through their strategies in the changed economic environment.”

Dear readers,

“The general outlook remains stark with economies enduring inflation and recession resulting from a variety of global issues. Combined with recent stormy political events in the UK and the swift and sharp reactions this has caused, it is fair to say that Q3 2022 has been more turbulent and uncertain than ideal. The new, new government appears to enjoy more market confidence and a general belief in its ability to handle the most pressing economic and social issues. Meanwhile, the Bank of England took a significant interest rate step in November by raising the prime rate by 0.75 points to 3.0 %.In line with these events, the real estate industry has been quieter with many investors pausing and re-evaluating investment decisions in Q3 and little change anticipated for Q4. Overall, we expect the coming year to be quieter as investors and lenders work through their strategies in the changed economic environment. However, opportunities remain for long dated income, offices with strong ESG criteria and residential, with logistics also remaining of interest to UK investors.”


Your Claudia Nacke

Contact

Ms Claudia Nacke
Head of Real Estate Finance UK, London Branch

Phone: +44 20 742 947 00
E-mail: Claudia.Nacke@DeutscheHypo.com

REECOX UK down 6.4 %

The UK real estate index continued its downward trend in the third quarter. It began the period with a 3.3 % decline in July, but then increased slightly by 1.2 % in August, before falling again by 4.3 % in September to produce an overall performance of -6.4 % at the end of the third quarter. The REECOX UK therefore stands at 189.5 points after suffering the second sharpest slide compared with the other European countries.

Real estate share index FTSE EPRA/NAREIT UK records dramatic slump

The FTSE EPRA/NAREIT UK real estate index posted a significant loss in the third quarter. Following slight declines in July (2.4 %) and August (1.0 %), the downturn peaked in September with a plunge of 21.5 % to 869.6 points. The FTSE 100 blue-chip index also showed a negative trend. Its initial gain of 3.5 % in July was erased by declines in August (1.9%) and, in particular, September (5.4 %). Overall, the index fell by 3.8 % in the third quarter to around 6,894 points. Economic expectations, as reflected by the Economic Sentiment Indicator (ESI), remain negative. The ESI closed the quarter at 85.0 points, down 7.4 % on Q2.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-2207/2208/22Q3-22Delta (%)
Q2-22 / Q3-22
DE
do
dodo
dodo
eq
upup
289.8
289.2
278.1
258.9
-10.7
GB
do
dodo
dodo
upup
upup
202.5
195.8
198.1
189.5
-6.4
PL
dodo
do
dodo
upup
up
183.1
181.9
179.4
175.1
-4.4
NL
do
do
dodo
eq
upup
184.8
189.5
183.2
175.8
-4.9
FR
do
do
dodo
eq
upup
225.6
231.9
227.5
219.3
-2.8
ES
dodo
do
dodo
eq
upup
178.4
174.9
175.3
172.9
-3.1