Capital values down -0.1% for UK commercial property in May 2019

Across UK commercial property, capital values fell -0.1% in May, according to the latest CBRE UK Monthly Index. Rental values were flat and total returns were 0.3%.

Retail sector capital values decreased -0.6% in May. Rest of UK High Street Shops, Retail Warehouses and Shopping Centres performed worse than the sector average, all recording capital value falls of -0.7% over the month. South East High Street Shops capital values declined ‑0.3% over the last month. Rental values fell -0.2% in May.

Following two consecutive months of outperformance, the Office sector was not the strongest sector in May. Capital values increased 0.1%, the lowest recorded capital value growth for the sector since October 2016. Rental values declined 0.1%, pulled down by Rest of UK Offices (-0.5%), while West End office reported an increase in rental values of 0.2%.

The Industrial sector returned as the strongest performing sector in May. Capital values in the Industrial sector increased 0.2% in May. South East Industrials marginally outperformed Industrials in the Rest of UK across capital growth, rental growth, and total returns. Rental values increased 0.3% across the Industrial sector.

Robin Honeyman, Research Analyst at CBRE UK
We are almost at the half way point of the year and property has yet to really get out of the blocks. With no strong economic growth stimulus, with resolution to Brexit still apparently months away and with the Summer break upon us, investors may have to wait a little while longer for things to get exciting.
Robin Honeyman, Research Analyst at CBRE UK