UK commercial property total returns reached 10.2% for 2017, at the end of November 2017, ahead of the IPF’s consensus forecast of 8.5% for 2017 as a whole. This is according to the latest CBRE Monthly Index. Total returns for November were 1.0% for All UK Property. Capital values increased 0.5% at the All Property level in November, boosted by the Industrial sector’s out performance. Rental values increased 0.2% over the month.

The Retail sector recorded capital value growth of 0.2% in November. Retail warehouses slightly outperformed the other subsectors for the second consecutive month with growth of 0.3%. Shopping Centre capital values were stable in November. Rental values in the Retail sector increased 0.2% over the month. High Street Shops in the South East reported flat rental values while Shops in the Rest of UK reported rental value growth of 0.1%.

Industrial capital value growth again outperformed the other main sectors in November, at 1.5%. South East Industrials slightly outperformed the Rest of UK with an increase of 1.6% compared with 1.4% for the latter. Rental value growth in the Industrial sector was 0.5%, with the South East again slightly outperforming the Rest of UK (0.6% and 0.2% respectively).

Capital values in the UK’s Office sector increased 0.2% in November. Capital values in the Outer London/M25 and Rest of UK markets increased 0.4% and 0.3% respectively while the City submarket recorded a decrease in capital values of -0.1%. Both the City and West End & Mid Town submarkets reported a decrease in rental values in November (-0.1% and -0.2% respectively). Rental values were flat in Rest of UK Offices. Outer London/M25 Office rental values increased 0.4% over the month.


Miles Gibson, Head of UK Research at CBRE
UK property has performed steadily and above expectations in 2017 so far, with total returns now in double digits. Industrials continue to lead the way.
Miles Gibson, Head of UK Research at CBRE