Holidays lead to slower April markets – CBRE
The numerous bank holidays in April led to a slowdown in the performance of commercial property markets last month as some transactions were put on hold, says CB Richard Ellis. The firm’s Monthly Index for April shows a capital gain for all property of 0.1% and total returns of 0.6%, with all three major sectors weakening significantly from their March results.
CBRE says there was again a marked difference between the strong market for available office space in Central London and the weaker regional offices market. Central London offices produced a total return of 0.9% as values grew by 0.4% but in the M25/Outer London returns were 0.2% after a capital decline of 0.4% and values continued to fall in the rest of the UK market. In total, the offices sector produced a total return of 0.6%.
The total return for retail was 0.5% for April. Retail warehouses performed strongly, producing total returns of 0.9% and capital growth of 0.4%. The shops subsector saw capital growth of 0.1% in line with the All Property benchmark, and total returns of 0.7%. Shopping centres saw values fall by 0.3% and returns of 0.2% after a strong March performance.
Returns from industrial property weakened in April with capital growth of 0.1% and returns of 0.6%.
Rental values were flat overall for All Property with Central London offices and retail warehouses the only areas to see any gains – they grew by 0.5% and 0.1% respectively.
Nick Parker, Senior Analyst at CBRE, said: “Whilst office markets in Central London power ahead, elsewhere in the UK, occupier markets continue to struggle. Rents continue to decrease in both the M25 and regional markets, but it is shopping centres where the largest rental corrections have occurred this year, with rents down 1.1%. This perhaps reflects the current reluctance of occupiers to expand against a background of ongoing uncertainty and retrenchment by UK consumers.”
