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CBRE Monthly Index: UK Commercial Property Returns Flatline

Global real estate firm CBRE has announced that capital values across UK commercial property decreased -0.4% in September 2019, while rental values were flat, with the total returns 0.0%.

According to the latest CBRE Monthly Index, in Q3 2019, UK commercial property capital values decreased -0.9% overall, making it the fourth successive negative quarter of the year.

As highlighted in the table below, the office sector recorded capital growth of 0.4% and total returns of 0.8% in September, with Central London offices out-performing the sector (+0.6%).

CBRE UK Monthly Index Snapshot: September 2019

In the retail sector, capital values fell -1.7% in September, thanks to the poor performance of Shopping Centres (-2.6%) and Retail Warehouses (-1.8%). Rental values in this sector also decreased -0.6% over the month, while capital values in the retail sector decreased by -3.6% (vs -2.2% in Q2 2019).

During Q3, the CBRE UK Monthly Index reported a total return for all property of 0.5%, with office, industrial and Central London offices producing 1.8%, 1.7% and 1.9% respectively.

CBRE UK Monthly Index Snapshot: Q3 2019

Robin Honeyman, Senior Research Analyst at CBRE UK, said: “All Property returns in the third quarter were again dampened by continued poor performance in the Retail sector where returns were down on the previous two quarters and on the same period last year. However, performance in the Office and Industrial sectors remains steady. Our index shows total returns of 1.9% for the year so far, compared to the IPF’s August Consensus Forecast of 0.9% for 2019 as a whole.”

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