UK commercial real estate investments generated a 0.1% total return during Q1 this year compared with the previous quarter, according to the latest data from MSCI.
The MSCI UK Quarterly Property Index showed total returns of -13% compared with Q1 the previous year, while a decline in capital growth “moderated”.
MSCI said that although performance had “much recovered” from the previous quarter, capital growth remained negative across all sectors, falling to -1% overall. Researchers said this “all but” offset the income return of 1.1%.
Researchers at MSCI added that while sector-level returns have converged since Q4 last year, investors should be “cognisant of the wide spread between the underlying assets”.
In Q1 this year, a quarter of assets recorded positive capital growth. However, this varied between sectors, as only 16% of office assets recorded capital appreciation in the quarter compared with 33% of industrial properties.
The index measured the performances of 8,222 property investments worth a combined £142.4bn.
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