South recovering more steadily – CBRE
CB Richard Ellis says its prime rent and yield monitor for the second quarter shows how in general the UK commercial property markets appear to be recovering more steadily in the south of the country, while northern regions are still showing signs of weakness.
The group said its All Property average prime yield was more or less stable in Q2, dipping 5bp during the quarter to 6.3%. All Property prime rental growth was flat, after 0.6|% growth in Q1.
The group says the office sector saw the largest shift in yields, thanks to stronger sentiment in Central London, while the yield shift within retail was negligible. “West End office yields sharpened the most, coming in by 30bp in Q2,” CBRE noted.
There was modest growth in rents for office space, driven mostly by rising office rents in Central London, but there were also gains in other markets including Scotland, the East Midlands and the Northwest.
Within retail there was positive growth in Central London and the East of England, while most northern regions continued to show weakness. Prime industrial rental growth dipped by 0.2%, an improvement on the previous quarter.
Nick Parker, senior analyst for UK research at CBRE, commented: “The south of England seems to be recovering at a steadier rate, with some of the northern regions continuing to show signs of weakness across all three sectors. Much of the rental recovery to date has been confined to Central London.”
