Property values increased by just 1.9% in 2011 – compared with 8.9% the previous year – according to CBRE.
This faltering growth contributed to a halving in income returns, which fell to 8.1% from 16.1% the previous year.
The agent said the “relatively healthy figure” was driven by a strong prime office market, particularly central London, which delivered returns of 12.7%, down from 27.3% in 2010.
The second-strongest sector was retail warehouses, which brought in returns of 9% compared with 16.5% in 2010. Regional offices were the weakest sector, with total returns of 3.3%, less than half 2010’s 8.1%.
December’s monthly index showed total returns of 0.5% for the month, and no movement in capital values.
