Twin track market persists as robust office and industrial sectors mitigate retail declines

Across UK commercial property, capital values decreased -0.3% in October, according to the latest CBRE UK Monthly Index. Rental values decreased -0.1% and total returns were 0.2% for the month. Positive but slowing Office and Industrial performance was again outweighed by negative retail returns.

Capital growth in the Industrial sector slowed to 0.1% in October, down from 0.3% in September. South East Industrials continue to outperform Rest of UK, with capital growth of 0.2% for the month, while values in the Rest of UK fell -0.2%. Rental values across the sector increased 0.1% and total returns were 0.5% for the month.

Capital values in the Office sector increased 0.2% over the month, outperforming the Industrial sector for the fourth month this year. Central London Office capital values increased 0.1%, while in the Outer London/M25 and Rest of UK submarkets capital values increased 0.1% and 0.4%, respectively. Rental values increased 0.2% across the sector in October. Rental values in Outer London/M25 and in the Rest of UK increased in line with the sector average (0.2%).

Retail sector capital values fell -1.0% in October. October’s results were pulled down by Retail Warehouses (-1.2%) and Shopping Centres (-1.1%). UK High Street Shops (-0.7%) performed better than the sector average. Retail sector rental values were down -0.4% and total returns were -0.5% for the month.


Robin Honeyman, Research Analyst at CBRE UK
October’s results were again a repeat of the wider trends reported throughout 2019 so far, with poor Retail performance dragging down All UK Property results. With year to date returns of 5.2% and 5.8% respectively, the battle is on between Offices and Industrials as to which will be the best-performing market of 2019.
Robin Honeyman, Research Analyst at CBRE UK