U.K. commercial real estate values rose for the seventh straight month in November as Britain’s economy strengthened, Investment Property Databank Ltd. said.
The average value of stores, offices and industrial properties climbed 0.9 percent from a month earlier, London-based IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 1.5 percent, the most since March 2010.
Barclays Plc predicts that U.K. economic growth will accelerate to 2.3 percent next year from 1.4 percent this year. That’s likely to boost demand for stores, warehouses and office buildings and make it easier for landlords to raise rents.
This year “has seen a real turnaround in the performance of commercial real estate, with growth slowly creeping further afield from London during the second half of the year, alongside rising economic confidence,” Phil Tily, a managing director at IPD, said in the statement. “This has driven the rising returns.”
Office values gained 1.4 percent and warehouses climbed 1.6 percent, IPD said. The average value of retail properties rose by 0.4 percent.
Income-producing commercial properties lost value for 17 straight months through March and were unchanged in April before the seven-month rally began.