Another strong month for the Industrial sector bolsters values at the all property level
Capital values were unchanged at 0.0% across all UK commercial property in November 2020, according to the latest CBRE Monthly Index. This represents the first time since October 2018 that capital value growth has not been negative at the all property level. Over the month, rental values fell -0.2%. Total returns were 0.5%.
In November, the Retail sector recorded a -0.8% decrease in capital values. Both High Street Shops South East and Retail Warehouses outperformed sector average, with values decreasing by 0.3% in both subsectors. Retail rental values declined -0.5% over the month, only Retail Warehouses reported a smaller fall at -0.2%. Retail total returns were -0.2% for the month.
The Office sector posted capital value growth of -0.4% over the month. Within this, Central London Offices saw values decrease by -0.2%. In contrast, Offices in the rest of the UK reported a greater fall in values than sector average at -0.5%. Average Office rental values fell -0.2% in November, this was pulled down by City Offices at -0.6%. Office total returns were 0.1% for the month.
November was another strong month for the Industrial sector. Capital values rose 1.8%, the largest monthly increase since December 2017. Industrials South East reported even greater growth at 2.0%. In November rental values increased 0.3%, both Industrials in the South East and the rest of the UK increased by sector average. Total returns for the month were 2.2%.
Despite a second national lockdown in place throughout November, commercial property values did not report falls anything like the magnitude reported in March. While the Retail and Office sectors continued to see values decrease, November was notable for the fact that capital values did not fall at the all property level. This was largely due to strong Industrial sector performance, which pulled up the overall average. By the end of 2020 Industrials now look as though they may even surpass the capital growth reported by the sector in 2019.