UK commercial property capital values increase 0.1% in August

Across UK commercial property, capital values increased 0.1% in August, according to the latest CBRE UK Monthly Index. Rental values were flat over the month.

Capital values in the Industrial sector increased 0.7% in August, outperforming the other main sectors. South East Industrials continue to outperform those in the Rest of UK, with capital values increasing 0.8% over the month in the South East compared with a 0.6% increase in the Rest of UK. Rental values increased 0.2% across the Industrial sector.

Retail sector capital values fell -0.4% in August, a further fall from the -0.3% reported in July. For the fifth consecutive month, no Retail subsector reported positive capital growth last month. August’s results were pulled down by Retail Warehouses (-0.5%) and Rest of UK High Street Shops (-0.4%). Rental values decreased -0.1% over the month.

Capital values in the Office sector increased 0.2% over the month. In August capital values were flat in Central London while Office capital values in the Outer London/M25 and Rest of UK markets rose 0.5% and 0.3% respectively. Rental values increased 0.1% across the sector last month. Central London rental values were flat. Rental values in Outer London/M25 increased 0.2% and 0.1% in the Rest of UK.

Robin Honeyman, Research Analyst at CBRE UK
Investors returning from their summer holidays should not have too many surprises awaiting them. As has been the case all year, Industrials continue to out-perform, whilst Retail continues to be challenging, with retail capital values at their lowest since December 2016.
Robin Honeyman, Research Analyst at CBRE UK