Commercial property price growth falls in August - CBRE

Published 08th Sep 2010

British commercial property price growth fell for the fifth consecutive month in August as worries over tenant strength curbed investor enthusiasm for buying discounted assets, data showed on Wednesday.

The latest monthly index from CB Richard Ellis showed average values gained 0.3 percent last month, after a 0.4 percent increase in July, taking the year-to-date rise in property values to 7.5 percent.

The All Property total return -- comprising capital value growth and rental value growth -- slowed to 0.8 percent last month, from 0.9 percent in July. All Property rental values were flat in August, down 1 percent in 2010 so far.

"This month's returns confirm the growing mood of reflection among investors," said David Wylie, head of UK Economics and Forecasting at CBRE.

"With a significant re-rating of UK property already behind us ... investors are looking for more compelling signs of recovery in occupier markets before committing further to the market," he said.

Average commercial property values are up 18.6 percent from their lows in the middle of last year, CBRE said.

Despite posting small dips in values and total return, central London offices remained the strongest performing sector in August. The sector posted total returns of 1 percent, down 0.2 percent on July figures, and a 0.6 percent rise in values, 10 basis points below last month's growth.

Industrial property remains the weakest sub-sector in terms of performance this year, with total year-to-date returns of 8.7 percent, compared with 12.1 percent for retail real estate and 14.3 percent for offices.

Source: ' Reuters '

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