CBRE Monthly Index for January shows a weaker start to 2012
The performance of UK commercial property last month was slightly weaker than the solid finish seen to 2011, says CBRE. The firm’s Monthly Index for January shows total returns on UK commercial property of 0.3%, down from the 0.5% recorded in December. Capital values were down 0.2% in January.
The sectors for office space and industrial units produced total returns of 0.3% compared with the 0.2% reported for retail property. Capital values fell 0.1% for office space in Central London last month, and for the UK overall office values were down 0.2%, in line with the decline in the industrial and retail sectors. Values for office space in the rest of the UK and the Outer London / M25 subsectors were weaker, falling 0.4% in both markets.
Retail warehouses bucked the wider trend, CBRE said, with values remaining flat and total returns from this subsector of 0.4%. Values for shopping centres fell 0.5%.
Rental values at the All Property level dipped 0.1% in January, which CBRE said was a slight deterioration from the previous month. Industrial property was the worst affected (-0.3%) while retail and office property rental values declined 0.1% in line with the overall figure.
Nick Parker, senior analyst of economics & forecasting at CBRE, said transactional activity in December had been encouraging as overseas investors bought into UK property “in a market where buyers currently hold the cards”. He expects international investment to remain a key component of investment in the UK property market this year.
He said the January performance had been no surprise, as sentiment had been weakening in line with the global economic slowdown since mid-2011. “Whilst it is a weak start to 2012, performance this year will be largely dictated by how events unfold in the eurozone,” he added.
