Ben Burston, Head of UK Research and Ben Clarke, UK Research
Historically there has been a strong correlation between prime and secondary commercial property values. As such, property research has tended to focus on the more transparent prime markets, and practitioners have used this as a proxy for secondary market performance.
Since the financial crisis, however, prime and secondary market performance has diverged sharply. The secondary market has performed poorly compared to prime, both in terms of rental declines and outward yield movements, and this has led to steep value declines and negative total returns.
This webcast looks at the evolution of pricing in the secondary market, and at the relative performance of different sectors. It looks at the reasons for the poorer performance of secondary and considers how the market will evolve in coming years. We provide a forecast for secondary rents and yields, and finish by noting the implications of these forecasts for capital growth and total returns across the UK secondary market.