CB Richard Ellis Monthly Index reveals third consecutive month of capital growth
London - 8th October 2009 - The latest CB Richard Ellis (CBRE) Monthly Index reveals that commercial property has for the third consecutive month recorded positive returns and capital growth in September.
Momentum gathered across all sub-markets, with All Property returning 2% and capital value growth of 1.3%. Central London Offices and Retail Warehouses were especially strong, with capital values up by 2.1% and 2.4% respectively. Rental values continued to reflect the occupier uncertainty across the country, with a further fall of 0.5% at the All Property level.
David Wylie, Head of Economics & Forecasting at CBRE, commented: “September’s results confirm the strength of the recovery in the market, with 3 consecutive months of positive and improving capital growth, with values up 2% from their trough. This has been wholly down to yield recompression, as rental values continue to decline. Nonetheless, if the improvement is sustained, there is every chance that commercial property returns could end the year in positive territory, an impressive improvement given the negative sentiment throughout the early part of 2009. While this swing in sentiment is welcome given the slump over past two years, further economic headwinds could leave property vulnerable through 2010.”
The CB Richard Ellis Monthly Index showed:
• All property total return was 2.0% in September, but down –5.7% in the year to date.
• Capital values at the All Property level rose by 1.3% in September, taking the third quarter increase to 2%.
• All Property rental values declined by -0.5% in September, on par with August’s fall.
• Rental growth declined by -7.9% in the year to date and -10.1% annually.
• All Property equivalent yield fell 14bp, ending the month at 8.0%.