London, 9th March 2015 – The latest CBRE Monthly Index shows a steady start to 2015 after the very strong finish to last year, with both January and February recording slower capital and rental value growth. In February, average capital values for all UK commercial property increased by 0.5%, resulting in a total return of 0.9%. Rental value growth was 0.2% in February, the same as in January.

February 2015: CBRE UK Monthly Index Snapshot:

The start to the year suggests that total returns from commercial property will be lower in 2015 than in 2014, although still in double figures. However, January and February results for 2015 almost exactly match those in 2014 demonstrating that performance can change dramatically over the course of a year.

Rates of capital value growth for prime and secondary property have been equalising, although there is still marked difference in terms of rental value growth. With the exception of Central London offices, secondary property (the highest yielding 10% from the sample) in all market segments saw negative capital value growth from June 2009 (the turning point in the prime market) to October 2013. However, since then there has been capital value growth for secondary property in all segments apart from offices outside the South East.

There is a particularly strong geographic divergence across the office sector. In Central London capital value growth for secondary property has matched that for prime since October 2013. In the Outer London/M25 segment prime continues to outperform, but secondary capital values are also growing. However, beyond that capital values for secondary offices are still falling.

Andrew Marston, Director, CBRE said: “Monthly results are showing a clear picture of the geographical split in the performance; however there are also notable differences between sectors. The performance of secondary office and industrial property for the Office and Industrial sectors is slowly catching up with the prime, a pattern that has not yet been seen for retail sub-sectors.”