BPF-Grosvenor Property Leader Sentiment Survey 2017

Transcription

1 BPF-Grosvenor Property Leader Sentiment Survey Findings January 2018 Page 1

2 Introduction The British Property Federation (BPF) has collaborated with Grosvenor Britain & Ireland (GBI) and asked BPF members - property owners, investors and advisors - for their views on prospects for the UK s economy and real estate sector in the year ahead and beyond. Ipsos MORI was responsible for online fieldwork and data tabulation only. All analysis, interpretation and reporting of the survey results were carried out by the BPF and GBI. Out of a total of 424 BPF members, 83 took part in the survey. Full details can be found in the technical note. Page 2

3 Confidence in the UK s economic prospects short and medium term Q: How do you feel about the UK s economic prospects in the next 12 months and 5 years? Next 12 months Next 5 years 66% 62% 47% 44% 28% 28% 34% 33% 32% 25% 21% fieldwork fieldwork fieldwork 21% 20% 20% 19% 17% fieldwork fieldwork fieldwork 6% 6% 0% 2% 10% 1% 7% 11% 9% 7% 1% 11% 7% 4% Not at all Not very Neither nor not Fairly Very Not at all Not very Neither nor not Fairly Very Base fieldwork: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: All participants: N=112. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: All participants: N=122. Fieldwork dates: 24/11/15-24/12/15 Page 3

4 Confidence in the UK real estate sector short and medium term Q: How are you for the performance of the UK real estate sector in the next 12 months and 5 years? Next 12 months 69% Next 5 years 55% 44% 38% fieldwork 48% 41% fieldwork 30% 22% 22% 23% 19% fieldwork fieldwork 27% 24% 18% 18% 18% 17% fieldwork fieldwork 7% 7% 0% 4% 8% 4% 3% 10% 4% 1% 6% 7% 4% Not at all Not very Neither nor not Fairly Very Not at all Not very Neither nor not Fairly Very Base fieldwork: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: All participants: N=112. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: All participants: N=122. Fieldwork dates: 24/11/15-24/12/15 Page 4

5 Company s financial performance in 2018 Q: Looking ahead at 2018, do you think your company's financial performance will be better, worse or the same as? 66% % 62% +49 Better than previous year +23 Worse than previous year 12% 21% 13% Net financial performance fieldwork fieldwork fieldwork fieldwork: performance same as : 23% fieldwork: performance same as : 34% fieldwork: performance same as : 21% Base fieldwork: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: All participants: N=112. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: All participants: N=122. Fieldwork dates: 24/11/15-24/12/15 Page 5

6 Sector predicted to experience the best financial return in 2018 Q: Which one of the following UK property sectors do you believe will perform best in terms of financial return in the next 12 months? 43% 31% 28% 26% fieldwork fieldwork fieldwork 20% 21% 21% 13% 9% 9% 7% 4% 6% 8% 2% 3% 2% 2% 7% 1% 1% 1% 0% 2% 12% 9% 12% Industrial Residential Student accommodation Healthcare Office Hotel Retail None of these sectors Don't know Base fieldwork: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: All participants: N=112. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: All participants: N=122. Fieldwork dates: 24/11/15-24/12/15 Page 6

7 Investment by sector in 2018 Q: In which, if any, of the following property sectors is your company planning to increase or decrease investment in 2018? 60% 36% 22% 17% 52% 12% 13% 10% 11% 42% 34% 27% 19% 16% 11% 3% 2% 33% 23% 13% 27% 19% 27% 31% 33% 23% 13% 13% 19% 18% 21% 19% 13% 13% 18% 13% 13% 13% 24% 13% 27% 15% 11% 16% 16% 16% 8% 17% 16% 9% 12% 5% 5% 4% 2% 2% 4% 2% 3% 2% Net investment Increase investment No change in investment Decrease investment 31% Fieldwork: Sector: Residential Industrial Office Retail Hotel Healthcare Student accommodation Don t know: hotel 4%, retail 2%, industrial 2%, healthcare 2%, student accommodation 2% Not applicable: healthcare 78%, hotel 65%, student accommodation 62%, industrial 44%, retail 38%, office 27%, residential 16% Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page 7

8 Investment in 2018 Q: Is your company planning to be a net investor or divestor in property assets in 2018, or keep investment the same? Net Investor or Divestor ( fieldwork) 16% 22% Net divestor Neither a net investor or divestor 59% Net investor Net increase in investment: +43 Net Investor or Divestor ( fieldwork) 10% 34% 55% Net divestor Neither a net investor or divestor Net investor Net increase in investment: +45 Net Investor or Divestor ( fieldwork) 11% 27% 58% Net increase in investment: +47 Net divestor Neither a net investor or divestor Net investor survey: Don t know = 3%, survey: Don t know = 4% Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page 8

9 Development in 2018 Q: Is your company planning to increase or decrease its development activity, or keep it the same in 2018? Planned Development Activity ( fieldwork) 10% 28% 60% Decrease Remain the same Increase Net increase in development: +50 Planned Development Activity ( fieldwork) 20% 39% 42% Decrease Remain the same Increase Net increase in development: +22 Planned Development Activity ( fieldwork) 7% 31% 62% Decrease Remain the same Increase Net increase in development: +55 survey: Don t know = 2% Base fieldwork: Property Owners/Investors that develop (figures rebased): N=42. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors that develop (figures rebased): N=61. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: Property Owners/Investors that develop (figures rebased): N=60. Fieldwork dates: 24/11/15-24/12/15 Page 9

10 Financial gearing in 2018 Q: In 2018, is your company planning to increase or decrease its financial gearing, or keep it the same? Financial Gearing ( fieldwork) 16% 56% 23% Decrease Remain the same Increase Net increase in gearing: +7 Financial Gearing ( fieldwork) 22% 49% 22% Decrease Remain the same Increase Net increase in gearing: 0 Financial Gearing ( fieldwork) 11% 62% 24% Decrease Remain the same Increase Net increase in gearing: +13 survey: Do not gear = 5% survey: Do not gear = 6% survey: Do not gear = 4% Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page 10

11 Investment by location in 2018 Q: Where does your company plan to increase or decrease investment in the next 12 months? 53% 56% 39% 33% 35% 33% 38% 28% 24% 19% 34% 25% 24% 18% 21% 19% 11% 15% 16% 18% 27% 30% 33% 16% 28% 20% 25% 23% 18% 20% 23% 25% 25% 23% 24% 22% 27% 19% 25% 25% 23% 24% 10% 16% 16% 18% 5% 4% 4% 16% 14% 15% 15% 6% 9% 9% 9% 13% 9% 8% 5% 6% 6% 5% 2% 1% 2% 1% 7% 5% 3% 8% 5% 1% 2% 9% 7% 0% 4% 2% 1% 2% 5% 2% 0% 4% 11% 15% 14% 18% Net investment Increase investment No change in investment Decrease investment Fieldwork: Greater London South East & Anglia North West Midlands South West & Wales North & Yorkshire Scotland Northern Ireland Other EU countries Countries outside the EU Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page 11

12 Owner / investor challenges in 2018 Q: How challenging do you think these factors will be on your company over the next 12 months? 73% % 9% 7% Uncertainty caused by EU exit negotiations* The planning system 56 48% 45% 14% 30% 36% * fieldwork answer code: Uncertainty caused by potential EU exit Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page High construction costs % % 27% Low The tax regime availability of skills and talent Insufficient supply of developable land 11% 7% % 70% Low availability of credit High cost of credit Challenging Not challenging Net position: challenging minus not challenging ( fieldwork) Net position: challenging minus not challenging ( fieldwork) Net position: challenging minus not challenging ( fieldwork)

13 Advisors challenges for the sector in 2018 Q: How challenging do you think these factors will be on the UK real estate sector over the next 12 months? 87% % 79% % % 10% % 54% % 18% % % 23% % 18% % Challenging Not challenging Net position: challenging minus not challenging ( fieldwork) Uncertainty caused by EU exit negotiations* High construction costs Low availability of skills and talent The planning system * fieldwork answer code: Uncertainty caused by potential EU exit Base fieldwork: Advisors: N=28. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Advisors: N=45. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: Advisors: N=58. Fieldwork dates: 24/11/15-24/12/15 Page 13 The tax regime Insufficient supply of developable land Low availability of credit High cost of credit Net position: challenging minus not challenging ( fieldwork) Net position: challenging minus not challenging ( fieldwork)

14 Confidence in the Government s Brexit negotiation Q: How are you that the Government will secure a successful outcome to the Brexit negotiations? Not (net): 58% Confident (net): 29% Confidence 23% 35% 14% 20% 8% Not at all Not very Neither Fairly Very nor not Base: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Page 14

15 Ease of managing activity with Article 50 implementation period Q: The Government is now seeking a two-year implementation period following the conclusion of Article 50 negotiations for the UK to leave the European Union ( Brexit ). This will allow businesses to prepare for any future long-term relationship between the UK and the European Union. In your opinion will this implementation period make it easier or more difficult for you to manage your development activity and/or development/ property transactions? Will it make it Harder (net): 18% Easier (net): 65% Ease 17% 3% 15% 54% 12% Don t know Much A little A little easier Much easier harder harder Base: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Page 15

16 What is important in an implementation period for Article 50 Q: Which one of these, if any, do you think is the most important to the real estate industry in any implementation period for Article 50? Continued access to skills and talent to help workforce planning 43% Breathing space for the Government to develop a compelling plan for the UK economy 17% More time for occupiers negatively affected by the UK leaving the European Union to plan and adjust Avoidance of two periods of adjustment to new rules and regulations 12% 12% More time to plan for our next investment cycle 10% Other 4% Don t know 4% Base: All participants: N=83. Fieldwork dates: 26/10/17-15/01/18 Page 16

17 Technical note The British Property Federation (BPF) has collaborated with Grosvenor to contact BPF members. A total of 55 property owners/investors and 28 advisors took part. The BPF invited members to the survey, with Ipsos MORI carrying out fieldwork online and producing the computer tabulations. All analysis, interpretation and reporting of the survey results was carried out by the BPF and Grosvenor. Data for the survey is weighted to the known member profile of owners / investors and advisors. The audience surveyed were the BPF members, with a final sample size of 83 survey participants. Care should be taken when interpreting as some results are based on small sample sizes. Fieldwork was conducted between 26/10/17-15/01/18. Page 17

18 Sectors in which respondents operate Q: Please let us know which of the following property sectors your company currently operates in? 75% 75% 72% 69% 70% 63% 53% 52% 51% 57% 56% fieldwork fieldwork fieldwork 45% 35% 39% 19% 35% 37% 30% 20% 19% 13% 5% 13% 13% Residential Office Industrial Retail Hotel Student accommodation Healthcare Other Base fieldwork: Property Owners/Investors: N=55. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Property Owners/Investors: N=67. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork : Property Owners/Investors: N=60. Fieldwork dates: 24/11/15-24/12/15 Page 18

19 Sectors in which respondents advise Q: Please let us know which of the following property sectors your company currently advises in? 87% 78% 76% 76% 64% 64% 61% 82% 79% 64% 54% 54% 53% 53% 53% 43% 67% 62% 43% 47% 47% fieldwork fieldwork fieldwork 29% 28% 18% Office Retail Residential Hotel Student accommodation Industrial Healthcare Other Base fieldwork: Advisors: N=28. Fieldwork dates: 26/10/17-15/01/18 Base fieldwork: Advisors: N=45. Fieldwork dates: 01/11/16-07/12/16 Base fieldwork: Advisors: N=58. Fieldwork dates: 24/11/15-24/12/15 Page 19