London,
06
September
2016
|
16:09
Europe/London

RENTAL VALUES HOLD FIRM FOR SECOND FULL MONTH AFTER EU REFERENDUM

Rental values across the UK’s commercial property market held firm for a second consecutive month in August, while the decline in capital values slowed significantly, according to the latest CBRE Monthly Index.

Capital values fell by -0.5% in August, a much smaller decline than July’s -3.3%, suggesting a slowing of the Brexit effect. This trend was mirrored by total returns, which rose from -2.9% in July to -0.1% across the UK last month.

Slowing the recovery somewhat was the UK office sector with capital values falling by -0.8% in August. At -0.9%, the fall in Central London office capital values in August was much smaller than July’s -4.1%. City offices capital values fell by -0.6%, a fractional worsening compared with July’s -6.1% fall.

Overall, rents were static in August, Offices in London’s West End and Midtown saw rental values drop by -0.3%, though Outer London/M25 offices performed better, with rental value growth of 0.1%. Rental values grew slightly across UK retail property, by 0.1%.

Miles Gibson, Head of UK Research at CBRE
Despite fears that the UK property market would suffer significantly as a consequence of Brexit, August turned out to be a relatively stable month, with rents holding up and the drop in capital values starting to slow, and more quickly than many expected. 

August is traditionally a quiet period, but this data provides good evidence for a fairly rapid re-pricing and continued resilience in occupier markets across the board.
Miles Gibson, Head of UK Research at CBRE
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