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13. Mai 2013     Print Print 

UK commercial property total return increases to 0.6%

UK commercial property performance remained largely unchanged at the All Property level in April, according to the latest CBRE UK Monthly Index. Total return increased from 0.5% in March to 0.6% in April, with the annual return also picking up to 3.1% for the year to April 2013. However, capital values remained flat, and have declined by -2.8% over the course of the last twelve months.

All offices total return increased to 0.5% in April, while capital values remained at the level recorded in March. Overall sector returns were boosted by offices in Central London, returning 0.6% over the month. The biggest impact on performance was Mid Town offices, which recorded total return of 0.9% and capital value growth of 0.5%. Significantly, Outer London/M25 offices recorded small but positive capital value growth, the first positive monthly capital value growth in this segment of the market since August 2011.

The total return for the retail sector picked up to 0.6% in April. Capital values remained broadly stable with a small increase of 0.1%. Again this month, shopping centres had a significant impact on retail performance, recording capital value growth of 0.3%.

All property rental growth remained flat for the fourth consecutive month. Central London offices continued to see increasing rental values, with City office rental value growth of 0.3% and 0.1% for West End offices. Offices in the rest of the UK struggled with rents dropping by -0.2%.

Aleksandra Starczynska, Analyst, CBRE Research, said:
“The performance gap between Central London offices and other parts of the UK market has started to close over the last couple of months. Although it remains the best performing market segment, both rental and capital value growth has been slowing for Central London offices and at the same time performance in other segments has been improving.”