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Looking ahead in 2013, the Dunlop Heywood team predicts the high and lows of the year to come.

wantspacegotspace.co.uk - Looking ahead in 2013, the Dunlop Heywood teamStuart Hicks – Managing Director: There have been no material changes to the outlook for the UK economy recently. With the double dip in capital values now evident, the outlook remains weak.

Some expect all property capital values to drop by about 6% but this broad brush assessment translates into a much more diverse range depending upon, town, region, property type and market sector.

Most expect GDP to have contracted by about 0.5% in 2012, with a rise of only 0.5% likely in 2013. In the current environment and against a backdrop of high vacancy rates in most markets, our view is that overall capital values will fall in 2013. That said, the lack of new development activity in recent years may limit the scale and/or duration of rental falls, but will not prevent them.

There are pockets of growth in our region and any period of change generates opportunity for those able to move decisively.

Alistair Russell - Director of Investment:  At best the economy will flat line in 2013. So no rental growth prospects in the short term, indeed continuing rental decline in some locations/sectors.

Bank credit/availability of finance in the commercial property markets remains tight and selective.
Investment focus to the south east will continue with further polarisation of the property markets.

On the plus side, the lack of development activity will limit stock and, in some sectors, create undersupply. Anecdotally the banks are also softening their credit requirements. The spread of yields between prime and secondary assets (as defined by location, asset qualities, tenant and lease attributes) is also at an historic high. This mismatch could represent a major opportunity for investors depending upon their view of economic prospects (Markets always over correct going up or down). Property’s high income yields are looking attractive in comparison to other asset classes.

Steve Brittle - Associate Director, Manchester Office Market: A lack of available opportunities for company’s large office requirements may force businesses to turn their back on Manchester City Centre when choosing a new office.  Firms with large requirement could turn towards Salford Quays, South Manchester or Old Trafford as alternatives.

Take up for 2012 was predicted to reach circa 650,000 sq ft which is lower than 2011. This can be blamed on a low supply of new office space and a lack of standout large scale transactions.

It’s clear that the shortage of Grade A accommodation, along with continued uncertainty within the economy is still deterring larger occupiers from relocating. 2012 has been frustrating and 2013 could be the same.

Terry Goodall - Heading of Rating: whilst shopping remains a national sport, it is increasingly more armchair-bound rather that a brisk gallop through the shops.

10 % of UK retailing is now done online, this trend continuing to rise exponentially from 2% just 4 years ago. Major retailers are diverting their business resources online with, for example, Argos now having 25% of their turnover from online sales.

The retailing outlook?  Only prime shopping destinations are likely to prosper. Secondary shopping locations will continue to decline with the double whammy of a continuing recession and booming internet sales haemorrhaging business.

Posted by The Editor (wantspacegotspace) on 21st January 2013

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