Commercial property market grows, but lacks direction – CBRE
The UK commercial property market saw capital growth of 0.2% in October, according to the CB Richard Ellis UK Monthly Index. The market was boosted by the Central London office sector, which continues to grow strongly thanks to increasingly restricted supply and positive prospects for rental growth. Total returns for all property were 0.7%.
CBRE says the market continues to lack direction and thinks that, apart from Central London offices, other subsectors may be nearing an inflection point.
The offices sector was again the strongest in October, with capital growth of 0.5% and total returns of 1.0%, driven by the Central London subsector (capital growth 1.0%, total returns 1.4%). Outside the capital, office property generated total returns of 0.6% and flat capital growth.
Industrial property again lagged behind with no growth in capital values and total returns of 0.5%. Retail recorded capital growth of 0.1%, with the strongest growth from retail warehouses and shopping centres at 0.6% while high-street shops saw returns of 0.5%.
All Property rental values fell by 0.1% in October, with growth in Central London offices (+0.4%) countering weakness elsewhere.
Meanwhile, in a development sure to send further shivers through the construction sector, the social housing and buildings maintenance group Rok this morning filed for administration in a sudden move that could threaten several thousand jobs. Rok’s rival Connaught itself went into administration earlier this year amid sharp cuts in public spending by local authorities.
