Capital value growth in May – CBRE
CBRE has reported positive change in capital value across all sectors in its May Monthly Index – the first time this has happened since November 2011. Capital values increased y 0.1% at the All Property level. Aleksandra Starczynska at CBRE says this means that “total returns at the All UK Property level, while still subdued, are at their highest since summer 2011.”
The slight rise in capital values last month means that so far for the year UK capital values have fallen 0.3%. Total returns in May remained at 0.6%, taking the year-to-date total to 2.4%.
The offices sector recorded capital value growth of 0.2% and a total return of 0.7% last month, driven again by the Central London offices market, particularly the strong market for West End office space where capital values grew 0.8% and total return was 1.0% compared with 0.5% in April. The low levels of investor demand for offices elsewhere in the UK meant that CBRE’s Rest of UK Offices sector recorded the lowest capital value growth across all segments at minus 0.7%.
Retail capital values edged up 0.1% in May with all segments recording positive growth. Total return for the retail sector remained at 0.6%. The strongest performance within the sector came from the Shopping Centres market.
Rental values remained flat at the UK All Property level, for the fifth month in a row. The strongest growth in rental values was for City offices, up 0.5% over the month, while rental values for office space in the Outer London/M25 area fell by 0.2%.
