Here’s why
Rental values increased 0.1 per cent on average across UK commercial property in January 2018, according to the latest CBRE Monthly Index. The traditional steady start to the year saw capital value growth slow, from 1.0 per cent in December, to 0.2 per cent in January.
The Industrial sector continued to provide a boost to overall results, outperforming the other main sectors with capital growth of 0.7 per cent in January. Growth in the Industrial sector was strongest in the South East with capital values increasing 0.8 per cent and rental values up 0.4 per cent over the month. Industrials in the Rest of UK reported capital growth and rental growth of 0.4 per cent and 0.1 per cent respectively.
Retail capital values were stable in January, held up by Shops in the South East (0.3 per cent) and Retail Warehouses (0.0 per cent). Both Shopping Centres and Shops in the Rest of UK reported capital value falls of -0.1 per cent. Rental values in the Retail sector increased 0.1 per cent over the month. Retail Warehouse rental values increased 0.2 per cent while Rest of UK Shops reported a decrease of -0.3 per cent.
Capital values in the Office sector increased 0.2 per cent over the month, with all markets performing in line with the sector average. Rental values decreased -0.1 per cent across the sector, pulled down by falls of -0.1 per cent in both Central London and Rest of UK Offices.
Miles Gibson, Head of Research at CBRE UK, said: “It was a typically slow and steady start to the year, although it was unlikely January’s results would exceed December’s impressive results. Commercial property surpassed expectations in 2017 with double-digits returns. With crunch time for Brexit approaching and a slightly weaker economic outlook, the year ahead will undoubtedly have its fair share of excitement.”
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