Weaker property markets in February – CBRE
The performance of commercial property markets in the UK dipped slightly in February, with total returns at the All Property level of 0.1%, says CBRE. The firm’s latest Monthly Index shows capital values fell by 0.4% overall last month.
The index for February weakened despite an improvement in the market for Central London office space, which saw total returns of 0.5%, compared with 0.3% in January, and values rising by 0.1% after a 0.1% drop the previous month. But otherwise there was a general downturn in valuations across all market sectors, with shops (returns –0.3%; values –0.7%), shopping centres (returns –0.3%; values –0.8%) and offices outside Central London (returns –0.3%; values –0.9%) all showing negative total returns for February.
By sector, retail returns were down 0.1%, while offices returned 0.2% and industrial property returned 0.4%.
There was no change in rental values at the All Property level, suggesting that occupier markets were more stable in February. But looking beyond the headline figure, the revival of growth in the Central London offices market offset declines in nearly all other market areas, CBRE noted.
Nick Parker, senior analyst of economics & forecasting at CBRE, said: “A general cooling in investor sentiment has been evident for the past nine months, but until recently, valuations haven’t been adversely affected to any great extent. Now, the power has shifted back to the buyers, but with this shift comes great opportunities for those that are able to act.” He noted the continued focus on the UK by overseas investors and said the picture for the commercial property markets in London and the wider UK looked “quite positive”.
