UK commercial property returned 1.6% in Q3 2018 as capital values and rental growth slowed, according to the CBRE Monthly Index for September.
Capital values increased 0.3% for the quarter, the weakest quarterly performance of 2018 so far, while rents increased by 0.1%.
Returns and rents were dragged down by the retail sector, which saw values decline by 0.6% in September and 1.3% for Q3. Rents fell 0.7% in the quarter.
Robin Honeyman, research analyst at CBRE UK, said: “Results for Q3 look steady at the all property level, however this masks the divergent fortunes of the industrial and retail sectors.
“The aftermath of the EU referendum aside, it has been six years since retail capital values have been under this much negative pressure.
“At an all property level, the index shows total returns of 5.8% for the year so far, which is on par with the IPF’s August consensus IPD forecast of 5.8% for 2018 in total.”
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