Little change for CBRE January Monthly Index
Total returns for UK property came in at 0.3% in January, unchanged from December, while annual total returns slowed slightly to 1.7% according to CBRE’s latest Monthly Index. There was a continued slide in capital values, which fell 0.2% in January, repeating the declines of November and December.
Yet again it was Central London offices that moved against the tide, with capital values increasing 0.3% last month – for the ninth consecutive month, this was the only sector where capital values rose. This compares with a 1.1% fall in values for office space beyond the capital.
In the retail sector, values overall were down 0.3% but CBRE notes some signs of stabilisation in the retail warehouses subsector, with capital values slipping only 0.1%. However, looking at rental values the shopping centre segment suffered the largest fall last month, down 0.4%. Across all UK property rental values were flat, after rising marginally in November and in December. The only sectors to see rental growth in January were offices in Central London and office space in the outer London/M25 area, where rents were up by 0.8% and 0.2% respectively.
The decline in retail rents “is a clear reflection of the troubles facing stores at present, including a number of major chain administrations,” noted David Inskip, associate director research at CBRE. “Fortunately an improving outlook for household incomes should help to mitigate this as the year progresses,” he added.
