2025-06-15-莱坊-Investment_Yield_Guide_June_2025_4页_754kb

Prime Yield Guide – June 2025 Summary

Core Content Overview

This document provides a summary of prime yield trends across various real estate sectors in the UK, based on rack rented properties and excluding bond type transactions. The guide is for indicative purposes only and was prepared on 10 June 2025.

Sector Analysis

High Street Retail (Institutional Lot Sizes)

• Bond Street: Yields remain stable at 2.75% - 3.00%.
• Oxford Street: Yields are stable at 4.50%.
• Prime Towns: Yields are stable at 7.00%.
• Regional Cities: Yields are stable at 7.25%.
• Good Secondary: Yields are stable at 10.00%.
• Sentiment: Overall positive for Bond Street, stable for others.

Shopping Centres (Sustainable Income)

• Regional Scheme: Yields are stable at 8.25%.
• Sub-Regional Scheme: Yields are stable at 9.50%.
• Local Scheme (Successful): Yields are stable at 10.50%.
• Neighbourhood Scheme: Yields are stable at 10.00%.
• Sentiment: Stable across all categories.

Out of Town Retail

• Open A1 Parks: Yields are stable at 5.75%.
• Good Secondary Open A1 Parks: Yields are stable at 7.50%.
• Bulky Goods Parks: Yields are stable at 5.75%.
• Good Secondary Bulky Goods Parks: Yields are stable at 7.50%.
• Solus Open A1 (15 year income): Yields are stable at 6.00%.
• Solus Bulky (15 year income): Yields are stable at 6.00%.
• Sentiment: Overall stable, with positive sentiment for Solus properties.

Offices

• City Prime (10 years): Yields are stable at 5.25% - 5.50%.
• West End: Prime Core (Mayfair & St James' s): Yields are stable at 4.00%.
• West End: Non-core (Soho & Fitzrovia): Yields are stable at 4.75%.
• Major Regional Cities (10 years): Yields are stable at 6.50%.
• Major Regional Cities (5 years): Yields are stable at 7.50%.
• Secondary, Regional Cities: Yields are stable at 11.00%+.
• South East Towns (10 years): Yields are stable at 7.25%.
• South East Towns (5 years): Yields are stable at 8.25%.
• Secondary, South East Towns: Yields are stable at 11.50%+.
• South East Business Parks (10 years): Yields are stable at 8.00%+.
• South East Business Parks (5 years): Yields are stable at 10.50%+.
• Sentiment: Overall stable, with negative sentiment for secondary and business parks.

Warehouse & Industrial

• Prime Distribution / Warehousing (20 years [NIY], higher OMV/index): Yields are stable at 5.00%.
• Prime Distribution / Warehousing (15 years, OMRRs): Yields are stable at 5.50%.
• Secondary Distribution (10 years, OMRRs): Yields are stable at 6.00%.
• Greater London Estates: Yields are stable at 5.00%.
• South East Estates: Yields are stable at 5.25%.
• Good Modern Rest of UK Estates: Yields are stable at 5.00% - 5.25%.
• Good Secondary Estates: Yields are stable at 6.75% - 7.25%.
• Sentiment: Stable across all categories.

Specialist Sectors

• Car Showrooms (20 years with indexed uplifts & dealer covenant): Yields are stable at 6.00%.
• Budget Hotels London (20 years, 5 yearly indexed reviews): Yields are stable at 4.75%+.
• Budget Hotels Regional (20 years, 5 yearly indexed reviews): Yields are stable at 5.50%+.
• Student Accommodation Prime London (25 years, Annual indexation): Yields are stable at 4.25%+.
• Student Accommodation Prime Regional (25 years, Annual indexation): Yields are stable at 4.50%+.
• Healthcare (Not for Profit Operator, 30 years, Annual indexed reviews): Yields are stable at 4.75%.
• Healthcare (SPV credit, 30 years, Annual indexed reviews): Yields are stable at 5.50%+.
• Data Centres (Leased, 15 years, Annual indexation): Yields are stable at 5.00%.
• Life Sciences (15 years): Yields are stable at 4.75%.
• Income Strips (50 years, Annual RPI / CPIH+1% RRs, Annuity Grade): Yields are stable at 3.75%.
• Ground Rents (125 years, Annual RPI / CPIH+1% RRs, <15% EBITDA cover, Vacant Possession cover <40%): Yields are stable at 3.25%.
• Sentiment: Stable across all categories.

Key Trends and Insights

• Yield Stability: Most sectors show stable yields over the period, with minimal changes from June 2024 to June 2025.
• Positive Sentiment: A few sectors, such as Solus properties and some retail categories, show a positive sentiment.
• UK Financial Market: UK financial market volatility has eased, with the UK Systemic Stress Index falling by -86% over the past month.
• Pension Fund Investment: The UK aims to boost private market investment through the Mansion House Compact, with 17 major pension providers pledging to allocate 5% of their DC default funds to UK private assets by 2030.
• Shopping Centres: Expected to outperform over the next few years with a total return of 8.5% pa from 2025-2029.
• Debt Market: The Bank of England Base Rate and 5-year SONIA Swap Rate have decreased, while the 10-year Gilt Redemption Yield and Indexed Gilt Yield have increased slightly.

Conclusion

The Prime Yield Guide for June 2025 indicates a generally stable real estate market, with some positive trends in specific sectors. The document highlights the importance of understanding structural drivers in real estate and provides insights into future market performance and investment opportunities.