UK retail total returns turned negative for the first time since September 2009 at the end of 2018, according to the latest MSCI quarterly index.
Retail total return was -0.5% in the 12 months to December. Shopping centres fared worst at -5%, although standard retail in the South East still returned a positive 4.1%.
Industrials continue to outperform the rest of the property market, returning 16.4% in the year to Q4. Offices returned 6.2% – down slightly from 7% in the year to September – and all property total returns were 6%.
Colliers International forecast industrial returns to slow down to 6.5% in 2019.
Oliver Kolodseike, senior property economist at Colliers, said: “Although we expect an end to double-digit growth in 2019, as performance moderates and investors spread their interest across the different sectors, the industrial sector will remain the lead performer for the fourth year in a row.”
While all property equivalent yields stabilised at 5.45% at the end of 2018, industrial yields continued falling to 5.26% – a drop of 39bps from a year prior and 102bps from the end of 2016.
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