UK GDP contracted by 0.7% in Q2, significantly worse than consensus estimates.
Demand fundamentals are weakening in the London office market, and grade A vacancy rates have started to increase.
Demand for industrial space, although improving, remains below the long-term average. However, availability has started to fall, with shortages of grade A space occurring in the strongest locations only.
Unlike elsewhere in the UK, competition is fierce amongst equity investors looking for opportunities for prime assets in London. This is leading some up the risk curve.
Source : AXA Real Estate