Capital values across UK commercial property fell by 0.3% in February, while rental values fell by 0.1% and total returns grew by 0.2%, according to the latest CBRE Monthly Index.
Retail continued to struggle. For the sixth consecutive month, capital values (recording a 1% fall in February), rental values and total returns were all negative.
Shopping centres recorded the second-largest fall in capital values since July 2016 (2.1%), as rental values fell by 0.8%. This pushed change in total returns for the month to -1.6%.
High-street shops reported a decline in capital values of 0.3%, while rental values were flat.
In addition, retail warehouses experienced falls in both capital values (0.9%) and rental values (0.5%).
It was a different story for the office sector, however. For the 13th consecutive month it recorded positive capital values, rental values and total returns.
In February 2019 the office sector saw capital value growth of 0.1% and total returns of 0.5%, while rental values increased marginally (by 0.1%).
Even so, in central London the West End and Midtown submarkets recorded a fall of 0.1% in capital values for offices.
Outside London, UK offices pulled up the sector average, with capital value growth of 0.2% last month.
The industrial sector again provided a boost to overall results in February. The South East submarket performed strongest, recording 0.5% growth in capital values and 0.3% growth in rental values. However, the rest of UK experienced a fall in capital values of 0.1%.
Robin Honeyman, senior research analyst at CBRE UK, said: “February continued the slow start to the year, and while the office and industrial sectors maintained a steady path, the turbulence witnessed in retail – in particular in shopping centres – has shown no signs of abating.”
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