A slump in retail caused UK commercial property capital values and rental values to fall in November – the first time since October 2012 that both values have fallen.
All property capital values were down by 0.4%, according to CBRE, driven by the struggling retail sector, which was down by 1.9% last month. Outside of the period immediately after the EU referendum, it was the sharpest drop in retail capital values since May 2009.
Retail warehouses were responsible for the fall in retail capital values, decreasing by 3% in November.
All property rental value growth was down by 0.2%, also as a result of retail underperforming, with a 0.9% fall. Overall total return was flat despite retail delivering -1.4% last month.
Outside of retail, commercial property performance remained positive. The industrial sector continued to lead with total returns of 1.4%, capital value growth of 1% and rental value growth of 0.6%.
All property total return to date this year is 6.4%.
Robin Honeyman, senior research analyst at CBRE UK, said: “Sharp falls for retail warehouses this month resulted in the first negative capital value growth at the all property level since the EU referendum.
“The 3% decline in capital values over the past month brings the year to date fall for retail warehouses to 5.7%, still some distance behind shopping centres, where values have fallen by 8.2% in 2018 so far.”
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @karltomusk or @estatesgazette
