- Q4 2022, All-Property average prime rents increased 1.4% as yields moved up 50bps

 - Q4 2022 Rents up 7.41% on Q4 2021

- Office rents rose 0.8%, yields increased by 33bps

- In Retail, high street shop rents grew 2.3%, retail warehouses improved by 0.6%.

- Industrial reported rental growth of 2.1%, and the highest yield rise of 79bps

London – February 7, 2022 – Prime UK commercial property rents improved but yields moved out in the final quarter of 2022, according to leading global property advisor CBRE.

The firm’s latest quarterly Prime Rent and Yield Monitor revealed there was growth in rents across all property sectors – results were up 7.4 per cent on Quarter 4, 2021. Shop prime rents saw the most improvement quarter-on-quarter with a 2.3 per cent uplift (4.1 per cent year-on-year), however Industrials had the greatest improvement year-on-year with 12.5 per cent increase (2.1 per cent quarter-on-quarter). At the all-property level, yields increased 50bps.

High street shop prime rental growth increased 2.3%. Central London Shops registered the highest rental growth, while Retail Warehouses reported a mild increase. High street shop yields remained stable, rising by 1bp to 7.0% over the quarter. Retail warehouses yields reduced by 1bps, while Shopping Centre yields increased 39bps to 8.2%.

Industrial growth was driven predominantly in the North West, West Midlands, and Wales, whilst rental values remained flat in Scotland, Yorkshire & Humberside, and the North East over the quarter. Industrials in London and the South East reported 0.9% and 1.2% respectively.

Office prime rents increased 0.8% in Q4 2022. Scotland reported the largest increase in rents, while Central London rents rose by 0.7%. In the capital, West End and City rents grew but Docklands, Midtown and Southbank rents remained constant. The average yield for the office sector increased 33bps to 5.9% while the Central London office yield increased 18bps to 4.5%. While this reflects evidence available at the time in an uncertain market, price discovery is ongoing.

Jennet Siebrits, CBRE’s UK Head of Research, said: “The results show that, despite economic headwinds, prime rental growth in 2022 was resilient. However, property pricing has come under pressure as interest rates have risen and market conditions have changed.”