UK office capital and rental growth both fell 3% in the third quarter as commercial property registered the effects of the referendum, according to JLL’s latest UK Property Index.
Property returns fell 0.9% in Q3 as capital value growth slumped to -2.3%, down from 0.3% in Q2.
Offices were hardest hit with returns falling 1.8%, while the industrial sector saw positive returns of 1.0% – an 8.4% rise in the past year.
London underperformed relative to the rest of the UK, returning -1%, compared to -0.7% in the rest of the country.
Mike Penlington, director of valuation advisory at JLL, said: “The Q3 results highlight the effect of Brexit on the property market, with capital values falling 2.3% in the three months post EU referendum.
“That said, we have been seeing signs of stabilisation, and expect total returns to be broadly flat by the end of 2016.”
From September: UK property returns fall
From August: Capital values down 2.8%
