UK comm. property values up 0.2 pct in July-IPD

Published 16th Aug 2010

British commercial property values rose 0.2 percent in July, from gains of 0.5 percent in June, showing the market's 12-month rebound has lost steam as concerns rise over the state of the broader economy.

Investment Property Databank said on Friday in its monthly UK index that British commercial property capital values have gained 15.4 percent since August 2009.

"The last time UK commercial property managed 12 consecutive months of capital growth was in the month the market peaked, in June 2007, when annual growth rate was 7.1 percent," Mark Clacy-Jones, research manager at IPD, said in a statement.

On August 6, the National Institute of Economics and Social Research said it expects UK economic growth to slow in coming months. It estimated July-quarter GDP growth to be 0.9 percent, against the June's quarter's 1.1 percent rise.

IPD said July's 0.2 percent positive capital growth matched the figure that kick-started the recovery in capital values at the end of last summer.

The index showed growth in all three sectors of commercial property -- offices up 0.3 percent, retail up 0.2 percent and industrial up 0.2 percent.

Since August 2009, offices values have gain a total of 13.8 percent, retail 10.8 percent, and industrial 18.6 percent.

"For four consecutive months the pace of capital appreciation has attenuated, as yield compression remains fractional across the sectors," Clacy-Jones said.

The income return on all types of commercial properties rose 0.6 percent in July, unchanged from the gains in June and May.

"So, the property picture looks stagnant at the end of the summer, but -- as we know -- this can change quickly as events over the latest cycle have proved," Clacy-Jones said.

Source: ' Reuters '

View All Latest News