UK commercial property capital values increase 0.4 per cent in July

New figures show

At the national level, commercial property capital values increased 0.4 per cent in July 2017 according to the latest CBRE Monthly Index, slowing from 0.6 per cent in June. Following the trend of 2017 so far, the Industrial sector provided a boost to the national average. Rental values increased 0.1 per cent across All UK Property over the month.

Capital value growth in the Retail sector was 0.2 per cent in July, pulled up by steady performances from South East High Street Shops (0.4 per cent) and Shopping Centres (0.3 per cent). Shopping Centres recorded their highest capital value growth of 2017. Retail rental values increased by 0.1 per cent over the month. While Retail Warehouse outperformed the other retail subsectors, no subsector reported falling rental values.

Capital values in the Office sector increased 0.3 per cent on average in July, down slightly from 0.4 per cent in June. City of London and Rest of UK offices pulled up the sector average, recording 0.4 per cent and 0.3 per cent respectively. For the second consecutive month, Central London office rental values decreased, although at a slower rate of -0.1 per cent compared with June’s -0.3 per cent. Central London office have not recorded rising rental values since March.

Industrial capital value growth again outperformed other main real estate sectors with an increase of 0.8 per cent in July following June’s strong performance of 1.5 per cent.  South East Industrials again outperformed Rest of UK, reporting a rise of 1.0 per cent over the month compared with 0.4 per cent. Rental value growth was also greater in the Industrial sector than the other main sectors, with rental values increasing 0.4 per cent. Again, South East Industrials pulled up the sector average with a 0.5 per cent rise in July.

Miles Gibson, Head of Research at CBRE UK, said: “The slowing performance reported in July is not unusual for the first month of a quarter, especially following the strong performance of H1 2017. Continuing the 2017 trend so far, national averages were boosted by industrial property.”