20 Sep 2018

UK Retail Sales due

After yesterday's stonking inflation numbers all eyes will be firmly on the UK (August) Retail Sales print due later this morning. They rose by 0.7% month-on-month in July following June's fall of 0.5%.

Excluding fuel, retail sales were firmer still at +0.9% after having contracted 0.6% in June. While predominantly non-food stores reported that high street footfall had dropped – amid the heatwave and World Cup – online sales had performed particularly well on the back of various promotions. Accordingly, online spending accounted for a record 18.2% of all retailing. Meanwhile, sales at predominantly food stores remained robust amid the warm climate. With temperatures having subsequently returned to more typical levels in August, one reasonable expectation is that store traffic will have similarly normalised. For August, we expect these factors to culminate in a moderation in monthly retail sales growth to 0.3%, while we look for a softer rise of 0.2% after stripping out fuel. Further ahead we believe that improving consumer fundamentals (amid a tightening labour market and rising real wage growth) should underpin higher spending on non-essentials, replacing the weather as the predominant supporting driver of overall retail sales. 

 

Yew Grove: Acquires Blackwater House for €1.85m   

 

Yew Grove (YEW) has announced the acquisition of Blackwater House, an office asset at Mallow Business Park in Co. Cork for an agreed price of €1.85m. The building was one of the assets referred to as forming part of the property pipeline in YEW’s admission document ahead of its recent IPO. The Grade A building has 28,880 sq ft of office accommodation. It is multi-tenanted, with 85% of rental income coming from government bodies (Irish Water and the Health Service Executive). We understand that the building is 72% occupied (so c. 8,000 sq ft of vacant space) and we note that YEW says that it intends “to invest further capital to enhance the building and will progress discussions to let the existing vacancy with prospective tenants”. The deal also brings a parcel of development land to YEW that provides future optionality. Mallow is a town with a population of 12,500 that is located c. 35km north of Cork City (population 125,000) and is well served in terms of infrastructure (it is on the intercity train line and on the N20 national primary route (road) connecting Cork City and Limerick City (the latter has a population of 94,000) 

 

Economic Releases

 

UK:        09:30 – Retail Sales             
EZ:        16:15 – Bundesbank President Jens Weidmann speaks in Freiburg, Germany 
              18:20 – ECB’s Praet speaks in New York
US:        13:30 – Philadelphia Fed Business Outlook   
              13:30 – Initial Jobless Claims   
              13:30 – Continuing Claims   
              15:00 – Existing Home Sales   
              17:00 – Household Change in Net Worth