At a sector level, offices experienced the highest rates of rental depreciation in a 16-year period, according to an IPF study.
An update on a report focusing on rates of rental depreciation and capital expenditure between 1993 and 2009, released at the IPD/IPF conference, found that offices depreciated by 0.8% pa.
This was followed by industrials at O.5% pa and standard retails at O.3%.
The report said that sector-level rates conceal variations in segment-level results as regional office and industrial assets showed greater depreciation than their counterparts located in London and the South East.
However, in the case of standard retail the opposite was found.
Shopping centres retained in institutional ownership showed very little depreciation at O.1%, but the segment had a high capital expenditure rate relative to other segments.
Offices received more capital expenditure as a proportion of value (O.5%) than standard retail or industrial assets, but the distribution of individual rates is highly skewed, with many assets receiving no CAPEX over the period.
bridget.oconnell@estatesgazette.com
