Steady performance in the Industrial and Office sectors is eclipsed by continued Retail declines

Across UK commercial property, capital values decreased -0.4% in November, according to the latest CBRE UK Monthly Index. Rental values decreased -0.1% and total returns fell to 0.0% for the month. In November, Industrials was the strongest performing sector, winning back the title after trailing Offices for three consecutive months. However, positive Office and Industrial returns were once again outweighed by negative Retail performance.

In November capital values in the Industrial sector grew by 0.2%. South East Industrials continue to outperform, with capital value growth of 0.4% for the month. Across the sector rental values increased 0.4% and total returns were 0.6% for the month.

Capital values in the Office sector increased 0.1% over the month. Central London Offices pulled up the overall figure with a capital value increase of 0.4%, outperforming the Outer London/M25 and Rest of UK submarkets which experienced decreases of -0.2% and -0.1% respectively. Rental values for the Office sector increased 0.1% while total returns were 0.5%.

Retail sector capital values fell -1.4% in November. This month’s results were pulled down by Shopping Centres (-2.2%) whereas South-East High-Street Shops (-0.5%) performed better than the sector average. Retail sector rental values were down -0.5% and total returns were -0.8%, both values also being pulled down by Shopping Centres this month.

November’s results echo those throughout the year. As Industrials and Offices vie to be the year’s best-performing sectors, their steady performance is not enough to mitigate the Retail declines which have dragged down All UK Property results.”
Toby Radcliffe, Research Analyst, CBRE