UK Property Market Forecast (King Sturge - Property Consultants)
The outlook for the UK economy has became more uncertain, and the equity market has seen sharp declines in recent months. In the 12 months to August the total return was -18.7%. The second quarter GDP data was surprisingly strong, showing growth of 0.6% on the previous quarter, but it is anticipated that growth for the remainder of the year will slow down.
As a result, forecasts for economic growth have been revised downwards from our previous forecast. However, there is better news for the property market, as the total return for all property has been revised upwards to 10.2% in 2002, and 10.3% in 2003. Please see below for a more detailed outline by property sector.
- The total return for the office sector is still expected to be around 6.7% in 2002, but climbing to 8.5% next year.
- Forecasts for the total return in the industrial market have been upgraded to 9.3% in 2002, and 10% in 2003.
- All retail is now expected to produce a total return of 13% in 2002, with standard shops 11.9%, retail warehouses 13% and shopping centres 15.1%. Shopping centre growth is expected to remain strong at 13.5% in 2003.
- Forecasts for house price growth have been revised upwards to 18.4% for 2002, and forecast remains unchanged at 4.0% growth for 2003.