UK commercial property rental values continue to grow in February
Growth in UK commercial property rental values accelerated in February 2017, with values growing by 0.2% compared with 0.1% in January, according to the latest CBRE Monthly Index. For the sixth consecutive month, the Industrial sector performed the strongest of the main sectors in terms of rental value growth, reporting a rise of 0.5% over the month.
Within the industrial sector, rental value growth was strongest in the South East. This regional trend was replicated in the office sector; Offices in Central London, West End & Midtown, and Outer London/M25 recorded rental value growth of 0.2% over February, while rental values in Rest of UK were flat. Overall office rental values increased by 0.1%. While Retail sector rental values also rose 0.1% in February, resilience in Retail Warehouse masked a decrease in Rest of UK high street shops of -0.3%.
Capital values across UK commercial property rose by 0.4% on average in February 2017. South East Industrials recorded capital value growth of 0.8% over the month, driving much of the UK Industrial sector’s 0.7% increase. Capital values increased 0.2% and 0.3% in the Retail and Office sectors respectively over the month.
“Property has got off to a solid start in 2017. Rental value growth and total return has run slightly above trend in January and February, due to a boost from the Industrial sector, which has continued to outperform the other main sectors.” said Miles Gibson, Head of UK Research at CBRE.