Mixed picture in March – IPD
IPD’s UK Monthly Index for March was again mixed, with All Property capital growth at 0.3% but rental growth ending after four consecutive months, coming in at –0.1% for the month. Within the overall figure for rents, the rental market for office space turned negative for the first time in four months as a result of lower growth in Central London offices and further declines elsewhere in the UK, IPD noted.
IPD said the modest 0.3% capital growth for March – 19 basis points more than in February – was entirely driven by yield movements, with a yield impact of 0.4% for March. Capital growth of 0.2% was recorded for March for both the offices and industrial property sectors, while for retail property the figure was 0.4%. Total returns for offices and industrial property came in at 0.8%, below the All Property figure of 0.9%, and for retail property the total return figure was 1.0%.
For the first quarter of 2011, IPD said capital growth for All Property was 0.6% compared with the 0.5% growth recorded in the final quarter of 2010. Rental values were unchanged over the quarter. IPD’s managing director for the UK and Ireland, Phil Tily, noted: “The modest increase in capital values in March led to a 2.3% total return for Q1, just a ten basis point increase on the 2.2% we saw in Q4.” Since capital growth turned positive, 20 consecutive months of growth have seen values now recover by 17.0%, IPD noted.
