Commercial Property improved?

UK commercial property sees improved performance across sectors


According to CBRE’s latest monthly index, the UK commercial property sectors performance has continued to improve within the last couple of months with total returns of 1.1%. Capital values continued to grow, increasing by 0.5% over the month, resulting in a small positive capital value growth of 0.1% over the year to date.

Across the major sectors, offices outperformed with total returns of 1.5% in August and capital values increasing by 1.%. The property services firm said that these figures were the result of strong performances in all segments within this sector.
Most notably, offices outside of London and the M25 performed very well, recording positive capital value growth for the first time since October 2011 at 0.6% over the month, and total return of 1.3%. Capital values for Outer London/M25 offices continued to grow, increasing by 0.9%, with total return of 1.6%. Central London, in particular Midtown, had a strong month with capital values increasing 1.0% over the month, resulting in total return of 1.5%.

Overall, rental values for UK commercial properties increased by 0.1%. The highest rental value growth in August was recorded for City offices at 0.7% and for offices in Midtown and West End the rise was 0.4%. Rents for High Street Shops decreased by -0.1% over the month.

‘August was a strong month for the regional office markets which showed positive capital growth,’ said Aleksandra Starczynska, CBRE research analyst. ‘Encouragingly, this was the first sign of growth in the regions since October 2011 and confirms the stronger performance of the market outside London as the economic outlook across the UK improves,’ she added.


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