UK Investment Marketbeat Reports

For the data behind the commentary, download our latest UK Investment Report.

An Even Playing Yield 

Over the last month, we have seen no yield movement across our 45 markets, with stability remaining the case across 39 of our 45 reported markets over the last quarter. This leaves six markets where we have seen inward yield movement – with two in retail, three across offices and one in the living sector. Co-living saw a 25 basis point shift during the quarter, and is the biggest annual mover at 75 basis points, alongside prime bulky solus warehouses. 

The MSCI Monthly Index for February brought a monthly total return of 0.6%, bringing annual total returns for the index up to 8.1%, a marginal increase on January and closer to levels last seen in the summer of 2022. The star performer for the month were Shopping Centres and residential both at 1%, with all sub-sectors running positive. Of all sub-sectors, only one – Rest of UK Offices – is currently running negative, at -0.2%. 

April Fools? 

On April 2nd, the US Government announced widespread ‘reciprocal’ tariffs. The widespread market turmoil, commodity price falls and the bond sell-off has led the US Government to call a 90 day pause, notwithstanding the base tariffs, on all countries except for China. 

While it is not clear how this ends up, the most notable impact is to drag on global and UK economic growth. In the short-term, the bond markets remain volatile, impacting relative pricing on real estate. On May 9th, UK 30-year gilts went as high as 5.649%, their highest since May 1998 as a result of a global sell-off of bonds. By April 10th, they were down in the region of ~5.4%. 10 year gilts were ~4.7% on 10th April, only coming in slightly from their high of 4.8% on 9th April. 

Comparatively, real estate equities have held up well but were ~6% down on pre-liberation day levels, albeit recovering well on April 10th. Over the same period, the FTSE100 was down ~8%.