Capital values for UK commercial real estate have fallen by a further 3% in December, taking the hit suffered by UK landlords during 2022 to £130bn.
According to the latest monthly index from CBRE, rental value growth for the month was 0.2% and total returns were -2.6%. For 2022 as a whole, capital values fell by 13.3% and annual total returns were -9.1%.
The monthly fall in December means that commercial properties lost 13.3% of their value in 2022, wiping about £130bn from the value of Britain’s £1tn estate of commercial warehouses, shopping centres and offices.
The decline is in sharp contrast with the previous year, during which values rose by 13.8% amid a post-Covid lockdown rebound.
Warehousing lost 4.4% in December, with sheds in the South East faring particularly badly. For 2022 as a whole, capital values for the industrial sector fell by 21.% and annual total returns were -18.1%.
Offices lost 3% in December, although central London offices were less effected, falling by 2.3%. Office blocks in commuter towns surrounding the capital dropped by 5.3%. Office capital values declined by 12.1% in 2022 and annual total returns were -8.3%.
Retail values fell by 2.5%, with retail warehouses falling by 3.1%. Retail capital values decreased by 8.1% over the full year and annual total returns were -2.1%.
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