Friday preview: Silver lining for UK retail sales, Segro results due
Data from the Office for National Statistics is unlikely to lift the dark clouds over UK retail but a better month is expected and could prove a thin ray of sunshine.
Retail sales fell by over 1% in December, as the real wage squeeze continued to weigh on spending, even over the festive season.
"That said," noted HSBC, "January saw a four-point rise in consumer confidence from December’s post-referendum low. Against this backdrop, and given the sizeable fall in December, we expect a small rise in volumes in this January reading."
The consensus forecast is expected to show a 0.5% month-on-month gain after the 1.5% fall the month before.
Together with the favourable base effect should leave the annual pace of growth at around 2.5%.
"However, looking ahead," said analysts at Daiwa, "we continue to expect the downward trend in retail sales growth to be maintained at least for a while, given that real wage growth is likely to remain absent and consumer sentiment is set to remain subdued."
Property developer Segro will release its full year results, following a solid third quarter trading update where £36.4m of total space had been contracted in the first nine months of 2017, which was 3% ahead of strong results a year earlier.
New leases in the UK were being signed 15% ahead of prior levels while vacancy fell to 4.1% from 5.5%, while some 313,000 square metres of development was delivered, generating £12m of rent, including the 156,000sq m fulfilment centre for Amazon in Rome.
UBS analysts forecast EPRA net asset value per share of 533p driven by operational results and 8.7% like-for-like revaluation, of which 3.6% from the second half of the year, leading to recurring earnings per share of 19.6p and a dividend of 16.8p per share.
"We expect an upbeat statement as we see continued momentum driven by e-commerce related tailwinds, driving both occupier demand for space and investor demand for assets. We look for a development pipeline update."
The Swiss bank's analysts were also look for some news on leasing progress – such as further details on Ikea's pre-lease of a 50,000 square metre warehouse at Port de Gennevilliers in France.
Friday February 16
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