UK’s commercial sectors showed total returns of 1.1 per cent, according to CBRE’s latest index. Capital values are continuing to grow, and increased by 0.5 per cent over the same period. As a result, the capital growth value increased by 0.1 per cent over the year to date.
Across major sectors, offices came out the leader, with total returns of 1.5 per cent in August. Capital values increased by a full percentage point. Strong performances in all segments within the sector were responsible for these figures, according to the property services firm.
Offices outside of the capital and the M25 performed very well. They recorded positive capital value growth for the first time since October 2011; the rate was 0.6 per cent over the month and the total return was 1.3 per cent.
Capital values for Outer London/M25 offices increased by 0.9 per cent, and the total return was 1.6 per cent. Central London (particularly Midtown) reported a strong month with capital values increasing a total of 1 per cent over the month. As a result, the total return was 1.5 per cent.
Positive growth was reported in High Street shops, shopping centres, and warehouses, which meant capital values increased by 0.2 per cent over the month. Total returns recorded were 0.7 per cent.
Industrials reported a fourth straight month of capital value at 0.8 per cent in August. Total returns were 1.4 per cent.
Rental values for UK commercial properties increased by 0.1 per cent. City offices recorded the highest growth in rental values at 0.7 per cent. Offices in Midtown and the West End recorded an increase of 0.4 per cent. Rents for High Street Shops dropped by -0.1 per cent during the month.
CBRE analyst Aleksandra Starczynska said, “August was a strong month for the regional office markets which showed positive capital growth.
“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.”
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