Robust growth at the All-property level reflects growth across every subsector in CBRE's Monthly Index for the first time since August 2017

Capital values increased 1.1% across all UK Commercial property in October 2021, according to the latest CBRE Monthly Index. In October, rental values rose 0.3% and total returns were 1.5%.

In October, Retail sector capital values rose 1.0%. This was driven by another very strong month for Retail Warehouses, where values increased by 1.7% over the month. Notably, Shopping Centres reported 0.2% capital growth, the first positive growth for the sector since August 2017. Retail rental values rose 0.3% over the month, driven mostly by 0.9% growth for High Street Shops where a strong performance from a limited number of assets pulled up the average. Retail total returns were 1.6%.

The Office sector saw capital value growth of 0.4% over October. Central London offices posted capital growth of 0.2%, with 0.3% and 0.1% growth reported in the City and West End respectively. Offices in the Rest of the UK posted the strongest performance of the month with 0.6% growth. All Office rental values were unchanged over the month. However, this does not reflect the difference between Central London (-0.1%) and Rest of the UK (0.1%). Office total returns were 0.7%.

In October, the Industrial sector reported capital growth of 2.1%, the sector’s fifth month year to date to post growth in excess of 2%. Industrials in the South East saw stronger capital growth than those in the Rest of the UK, with increases of 2.3% and 1.7% respectively. All Industrial rental value growth was 0.8% for the second consecutive month. Industrials in the South East reported rental values rising in line with the sector average, while in the Rest of the UK growth was slightly weaker at 0.7%. Industrial total returns for the month were 2.4%.

October has been another month of robust growth at the All-property level, reflected in growth across every subsector of the index for the first time since August 2017. Notably, values for Shopping Centres, the only subsector in recent months to continue reporting falling values, may have now reached a trough.
Toby Radcliffe, Research Analyst, CBRE