Property markets pick up in March – CBRE
There was a marked pick-up in the performance of all three main commercial property markets in the UK during March, says CB Richard Ellis. The firm’s Monthly Index shows total returns of 1.2% and 0.7% growth in capital value for All Property.
The market for office space in Central London has outperformed for 14 months, but was overtaken last month by shopping centres, which saw capital values grow by 1.5% with total returns of 2.0% compared with capital growth of 1.1% and total returns of 1.5% for office space in the centre of London.
Retail was the top performing sector overall in March, with growth of 0.8% and total returns of 1.3%. This is the first time in more than a year that the offices sector was not the strongest. Offices outside the capital remained weak, with values down 0.3% and total returns of just 0.2% in March. Within retail, shops underperformed the All Property benchmark, with marginal capital growth of 0.2% and total returns of 0.7% for the month. Retail warehouses saw a good improvement this month with capital growth of 0.6% and total returns of 1.0%.
Returns for the industrial sector strengthened in March, with capital growth of 0.4% and total returns of 1.0%.
Rental values for All Property were “marginally positive” in March, CBRE said, boosted by growth of 1.5% for Central London offices and 0.3% growth in rents for retail warehouses.
David Wylie, head of UK economics and forecasting at CBRE, said: “Performance of commercial property in March was surprisingly robust after a more tentative start to the year. The most encouraging factor in this month’s figures is that improvements in occupier markets are beginning to be seen in a number of sub-markets, notably Central London offices and retail warehouses, and this is helping to drive valuations ahead, reducing the reliance on further yield compression.”
