Capital values decreased -3.0% across all UK Commercial property in September 2022, according to the latest CBRE Monthly Index. That resulted in capital growth for Q3 2022 of -5.1% at the All-Property level. Over the month, rental value growth was 0.4%. Total returns were -2.7% in September and -4.0% in Q3 2022.

Retail capital value growth was -3.6% in Q3 2022, and the sector recorded the second consecutive month of negative capital value growth, decreasing -2.3% in September. Standard Shops reported capital value growth of -2.3%. Shops in the South East recorded growth of -2.2%, which was slightly less than the fall in values of Shops in the rest of the UK at -2.4%. Throughout Q3, Shopping Centres performed best with -0.2% capital value growth, and -0.1% in September. Retail Warehouses reported the lowest capital value growth of -3.1%. In September, rental value growth was 0.1% for the Retail sector. Rental values were driven by Retail Warehouse and Shopping Centres with 0.1% and 0.2% respectively. Standard Shops had the lowest rental value growth of -0.1%. Total returns for the sector were -1.8% in September and -2.1% in Q3 2022.

The Office sector posted the best capital value growth of all sectors, with -1.6% in September, and -2.3% over Q3 2022. Central London Offices performed significantly better than Outer London and M25 Offices for the second consecutive month, reporting capital value growth of -1.5% and -3.0% respectively. Offices in the rest of the UK had a smaller decrease in capital values at -2.3%. Rental values for the Office sector increased 0.1% in September and 0.4% throughout the quarter. Rental growth was driven by City Offices and the rest of the UK Offices, both with 0.2% growth, and Outer London/M25 Offices also recorded a 0.1% rise. Rental growth was flat for Central London. Over the month, total returns were -1.6% for the Office sector, and -1.3% over the quarter.

The Industrial sector posted capital value growth of -5.2% in September and -9.5% in Q3 2022. This is the largest monthly decrease for the sector recorded by the CBRE Monthly Index since the GFC. Industrials in the South East showed weaker capital value growth at -5.7% compared to -4.1% for Industrials in the rest of the UK. However, the sector continues to exhibit the strongest rental value growth at 1.0% in September, and 2.7% in Q3 2022. Rental value growth was driven by Industrials in the South East (1.1%) and pulled down by Industrials in the rest of UK (0.7%). In September, total returns were -4.9%, and were -8.8% in Q3 2022.

CBRE UK Monthly Index Snapshot: September 2022