London,
28
April
2017
|
10:50
Europe/London

UK COMMERCIAL PROPERTY PRIME RENTS UP 0.8% IN Q1 2017, BOOSTED BY INDUSTRIAL SECTOR

Prime rents in the Industrial sector jumped 3.3% in Q1, helped by performance in Eastern and South East markets

UK prime commercial property rental values increased by 0.8% on average in the first quarter of 2017, boosted by the strong performances of Industrials, according to CBRE’s latest Prime Rent and Yield Monitor. Overall, prime yields fell slightly over the quarter.

In Q1 2017, and for the second consecutive quarter, the Industrial sector recorded the largest increase in prime rental values of the main sectors. Prime rents grew 3.3% across the sector, with Industrials in the South East and Eastern markets outperforming all other locations, increasing 6.0% and 10.9% respectively. Industrials in the Rest of UK experienced no change in prime rents.

In Q1, prime rents in the Office sector fell -0.4% but there is a distinct regional divergence. Within Central London, prime office rental values were down -1.4% in Q1 2017, thanks to falls of -2.2% in West End, -2.3% in Mid Town, and -0.7% in City. Conversely, Rest of UK (excl. South East and Eastern) office prime rents grew 1.4% over the quarter, helped along by strong performances in the South West, North East, and Yorkshire & Humberside.

Prime yields fell by -4bps across UK commercial property over Q1 2017. Prime office yields fell -9bps in Q1. Central London yields decreased -13bps, pushed down by falling City and Southbank yields. Elsewhere, decreases of -25bps and -12bps in North East and Wales contributed to prime yields decreasing -2bps across the Rest of UK (excl. South East and Eastern). Yields for prime shopping centres and retail warehouses were relatively stable for the quarter. Prime high street shops and industrials also saw little yield fluctuation, ticking down -2bps and -1bp respectively.

Miles Gibson, Head of UK Research at CBRE
Following an uncertain 2016 and with the potential for further change in the political and economic landscape in 2017, Q1 2017’s results continue to demonstrate the resilience of the prime commercial property sector. The quarter’s positive growth in prime rental values provides an optimistic outlook for the year. However 2017 will not be without its challenges, particularly if weaker economic growth feeds through to slower tenant demand.
Miles Gibson, Head of UK Research at CBRE
Contact
photo:Lucy Sulkin
Lucy Sulkin
Communications Manager
+44 (0) 207 182 2134
/
+44 (0)7775 111 721
Share this release
Share on: Twitter
Share on: Facebook
Share on: LinkedIn
Latest news