Strong finish to 2014 for UK rental value growth

Total return across all sectors was 1.6% in December 2014, according to the latest CBRE Monthly Index. The strong end of the year provided total return of 19.7% for the last twelve months, with capital value growth of 12.9%. In comparison, total returns for 2013 were much lower at 11.5%, with capital value growth of just 4.6%.

December 2014: CBRE UK Monthly Index Snapshot: Refer to Figure 1.Significant improvements were seen in the rate of rental value growth across all UK property. Rental value growth for All Property was 0.4% for December 2014, the highest monthly rate recorded over four years. Rental growth in the year to December 2014 was 2.69%, but has been significantly stronger over the last three months.

Kevin McCauley
“Capital values for Central London offices have been boosted over the last few months, in particular in the last quarter, recording 5.2% capital value growth. This is reflected by an increase in activity on the investment side, with Q4 representing 39% of the 2014 investment total.”
Kevin McCauley

The final two months of 2014 witnessed resurgence in capital value growth in Central London offices, a trend which had been slowing in the early autumn. This return to growth coincided with an uptick in investment activity.

Aleksandra Starczynska
“Since the beginning of 2013, the recovery in the UK economy has gathered pace. This has been reflected in increasingly strong rental value growth in the CBRE Monthly Index. The highest rate of rental value growth was Central London offices (0.8% in December), however the rest of UK is improving steadily.”
Aleksandra Starczynska

Annual to December 2014: CBRE UK Monthly Index Snapshot: Refer to Figure 2.