Further increases in the rate of rental growth were recorded across all the main commercial property categories during September.
The latest CBRE Monthly Index shows that All Property rental growth for the month stood at 0.3 per cent – the strongest rate recorded since December 2008.
The office sector, once again, was the biggest contributor to rental growth, but by far the most significant increase to emerge came from the retail sector.
After lagging behind all other property sectors since the recovery of the market, retail property recorded overall rental value growth of 0.3 per cent. A breakdown of this figure reveals that shopping centres saw an uplift of 0.6 per cent, with high street shops not far behind on 0.5 per cent.
Graham Barr, Head of UK Retailer Representation at CBRE, said that the figures are a ‘positive sign’ for the retail sector. However, he cautioned that the polarisation that has characterised the sector for some time remains, with rental growth in some locations and falls in others.
Strong capital value growth means that total returns for All Property during the first three quarters of the year have already exceeded those for the entire of 2013.
The highest returns, of 20.8 per cent, came from Midtown offices, with the lowest coming from high street shops at 10.7 per cent.
Director of CBRE Research, Ruth Hollies, said; “All sectors have recorded strong total returns of 14.3 per cent so far this year. If capital value growth continues at the same rate in Q4 then the annual total return will be 19.6 per cent, which is well above last year’s 11.5 per cent result.”
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