Capital growth slows in May
Capital growth slowed further in May, says CB Richard Ellis. The group’s UK monthly index for May showed a total return of 1.2% and capital growth of 0.7%. “Investor demand has weakened in recent months as a result of growing nervousness over the economy, as well as renewed financial market uncertainty,” it noted.
Office space in Central London continued to turn in a strong performance, with total returns of 1.8% in May and 13.5% year-to-date. Offices overall saw total returns of 1.4% and capital growth of 0.9%.
Industrial performance on the other hand was weak in May, with total returns of 0.9% and only marginal capital growth of 0.3%. Retail property recorded total returns of 1.1% and capital growth of 0.6% for the month.
“Rental fragilities and declines are still present across most sectors, with Central London the only exception,” CBRE noted.
The short-term indicator for capital growth slowed further in May to 16.1% and that for rental growth improved slightly to –2.1%. “These figures illustrate the cooling investment sentiment and the slowly improving occupier markets,” the group noted.
