At the national level, commercial property capital values increased 0.4% in July 2017 according to the latest CBRE Monthly Index, slowing from 0.6% in June. Following the trend of 2017 so far, the Industrial sector provided a boost to the national average. Rental values increased 0.1% across All UK Property over the month.

Capital value growth in the Retail sector was 0.2% in July, pulled up by steady performances from South East High Street Shops (0.4%) and Shopping Centres (0.3%). Shopping Centres recorded their highest capital value growth of 2017. Retail rental values increased by 0.1% over the month. While Retail Warehouse outperformed the other retail subsectors, no subsector reported falling rental values.

Capital values in the Office sector increased 0.3% on average in July, down slightly from 0.4% in June. City of London and Rest of UK offices pulled up the sector average, recording 0.4% and 0.3% respectively. For the second consecutive month, Central London office rental values decreased, although at a slower rate of -0.1% compared with June’s -0.3%. Central London office have not recorded rising rental values since March.

Industrial capital value growth again outperformed other main real estate sectors with an increase of 0.8% in July following June’s strong performance of 1.5%. South East Industrials again outperformed Rest of UK, reporting a rise of 1.0% over the month compared with 0.4%. Rental value growth was also greater in the Industrial sector than the other main sectors, with rental values increasing 0.4%. Again, South East Industrials pulled up the sector average with a 0.5% rise in July.

Miles Gibson, Head of UK Research at CBRE
The slowing performance reported in July is not unusual for the first month of a quarter, especially following the strong performance of H1 2017. Continuing the 2017 trend so far, national averages were boosted by industrial property.
Miles Gibson, Head of UK Research at CBRE