I got my monthly snapshot of the market from Property Data which showed a reasonable start for January. Not as good as 2011 as you will see, but better than 2010 and 2009.
Although yields (the return on capital) have come in very slightly they are still pretty flat. The fall has been by around 0.25% against the last three, six and twelve month figures. It’s a step in the right direction. The lower the yield the higher the price paid. The last month showed an average of 6.09% – previously we have been stuck at around 6.35%
The market is still being skewed by a couple of deals. A Tesco portfolio was sold last month to Trinity College Cambridge for £450m and a portfolio of 14 warehouses were sold for £314m. These two deals account for nearly 40% of all transactions.
So, as previously it is difficult to read the tea leaves at the moment. It seems busier, we are seeing more enquiries – and there seems to be a little bit more of a positive feel about the place. Deals are still hard to do, due diligence is the new delay. Dotting of i’s and crossing the t’s takes time – especially when you do it two or three times! But there are some deals going on. Bank borrowing remains difficult.
It may be early days, but it would be nice to think that there was something of a revival going on. We certainly need some good news – the back end of 2008 seems a long time ago. Thats when the crunch hit. We had hoped that it might be short recession, but alas that wasn’t to be. The new world is here – maybe we are just getting acclimatised?









