CBRE reports record monthly total return for UK property

  The UK commercial property market saw a 3.4% total return in November, the strongest month recorded by the CB Richard Ellis Monthly Index.   CBRE said the return surpassed last month’s 2.7%, previously its strongest recorded monthly total return.   All-property capital values rose by 2.7% over the month, with retail warehouses and shopping centres leading the way with increases of 4% and 3.9% respectively.   Central London offices saw further strong performance, with capital values up 2.7 %.   All-property rental values continue to correct, although at a slower rate than last month, falling 0.3% in November. They are down 9.3% annually.   David Wylie, head of economics and forecasting at CBRE, said: “The turnaround in investor demand since the mid-year has seen a surge in the performance of commercial property, with year to date total returns now positive at 0.1%.   The strength and depth of current investor demand seems destined to lead to a continuation of the very strong returns seen in recent months into next year.   “However, the prospect of more significant increases in supply coming through, and the generally weak rental growth outlook, may act as a brake on the strength of the recent recovery.”   Rental growth declined by -8.5% in the year to date and -9.3% annually.   The all-property equivalent yield fell 21 basis points, ending the month at 7.6%.   paul.norman@estatesgazette.com