UK commercial property values continued to grow during March according to the latest data. The IPD Monthly Property Index reveals that the steady growth seen earlier in the year was followed by a further rise of 1 per cent.
This was the tenth month of consecutive growth during which values have increased by 6.8 per cent. However, values still remain below pre-recession levels.
The office and industrial sectors enjoyed strong returns of 2.2 per cent and 1.9 per cent respectively. Capital growth in these categories was 1.6 per cent and 1.5 per cent.
The retail sector showed further signs of slow recovery by recording returns of 1.1 per cent and capital growth of 0.6 per cent. This was the category’s strongest performance of 2014.
Rental performance is described as “positive but muted,” rising by 0.1 per cent in March. This growth contributes towards a modest rise of 1.2 per cent over the past 12 months.
Unsurprisingly perhaps, rental values in the retail sector continued to struggle. Despite Bond Street being named Europe’s most expensive street in which to rent property this week, the bigger picture tells another story.
Retail rents have now been in decline for a total of 70 consecutive months, leading to an overall decline of -12.6 per cent.
Despite this, returns from shopping centres and retail parks rose during March by 0.9 per cent and 1.2 per cent.
Commenting on the findings IPD’s Executive Director, Phil Tilly, said; “The broader UK commercial real estate market continues to show signs of recovery and growth, with March proving to be the strongest month of 2014 so far.
“While rental values remain weak for the beleaguered retail sector nationally, improving investor sentiment, added 0.6 per cent to capital values in March alone.
“Notably, the rate of capital growth for retail parks, distribution warehousing and department stores more than doubled month-on-month.”
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