CBRE Monthly Index

London – 6th November 2009 – The latest CB Richard Ellis (CBRE) Monthly Index reveals that the revival in commercial property continues to strengthen, recording a fourth consecutive month of positive capital growth and total returns in October.

Capital values increased by 2% over the month, with total returns of 2.7% thanks largely to another strong month for Retails and in particular Retail Warehouses. The retail sector saw values rise by 2.5%, with total returns up 3.2%, driven largely by a 4.3% rise in retail warehouse capital values. Offices also saw further improvement, producing total returns of 2.1%, although growth was more muted than for retails. All Property rental values fell by 0.4% in October, a marginal improvement on September’s figure, but an ongoing sign that occupier markets continue to struggle.

Nick Parker, Analyst for Economics & Forecasting at CBRE, commented: “The overall picture for commercial property continues to brighten after two testing years. October’s results demonstrate the strength of the renewed appetite for property, with total returns for October stronger than any month in the history of the CB Richard Ellis Monthly Index. What remains to be seen is how far this momentum will be sustained into 2010. It now looks almost certain that commercial property returns will end the year in positive territory, a remarkable turnaround after the sharp decline in values seen at the beginning of the year.

The CB Richard Ellis Monthly Index showed:
•All property total returns were 2.7% in October, –3.2% in the year to date.
•Capital values at the All Property level rose by 2.0% in October, the strongest monthly growth in the history of the index.
•All Property rental values declined by -0.4% in October, a marginal improvement on September’s decline.
•Rental growth declined by -8.2% in the year to date and -9.9% annually.
•All Property equivalent yield fell 18bp, ending the month at 7.8%.

View the November Monthly Index here
View the November Monthly Index here