London offices bolster a resilient Sept market
The UK property market was resilient during September, says CBRE, with the firm’s Monthly Index showing capital growth of 0.3% and a total return for all property of 0.8%.
By sector, offices were the strongest performing area, with capital growth of 0.6% and returns of 1.1%. This growth was solely driven by the strength of the central London office market, which saw total returns of 1.7% and capital growth of 1.3%, CBRE noted. Outside London, office markets continued to underperform, with the Rest of UK Offices sector showing its first negative total return since June 2009 with a 0.4% fall month-on-month.
Industrial property continued to produce weaker returns at 0.6%, with capital growth flat. Among the retail sub-sectors, the index showed 0.3% capital growth for standard retail and warehouses, while shopping centre values were up 0.2%.
Overall rental values were flat in September as some occupier markets showed more lively growth while others continued to decline. Rent levels for industrial property (-0.4%) continued to lag behind the improvement seen in most other sectors.
Nick Parker, senior analyst at CBRE, said there was little evidence that markets outside London were likely to see any more significant upside for the time being. “UK commercial property values have grown by 7.9% during 2010 and by 19% since June 2009. However, property values still remain 33.3% below their 2007 peak,” he added.
