Capital values slide across sectors in Q3

The All Property average prime yield rose 30 basis points to 5.1% in Q3 according to latest CB Richard Ellis Prime Rent & Yield Monitor. Yields now stand at levels last seen in Q1 2006 with all sectors recording falling capital values in light of a significant re-pricing throughout the commercial property market in Q3. All High Street shop yields softened 30 basis points in Q3 with only Central London bucking the wider trend as the average prime High Street shop yield in the Capital was unmoved 4.3%. Both the All Office and All Industrial average prime yield moved out 40 basis points in the three months to September.

Alongside this present negative investor sentiment towards UK commercial real estate, rental performance across all property sectors has come under-threat following downward revisions to UK economic growth in 2008, initiated by fears of a significant slowdown in the US. All Property quarterly rental growth was 1.1% in Q3, and 7% year-on-year - the bulk of the impetus remaining in the core Central London office markets.