Commercial property values are on the rise for the third month in a row! According to the latest figures from CBRE, the big winners are the industrial and retail sectors.
- Industrial: Capital values jumped by 0.3% in July, with the South East leading the pack. Rental values are also on the rise, up 0.5% over the month. This means investors are seeing strong returns on their investments, with a total return of 0.7% for the month.
- Retail: While retail has been a bit slower than industrial, it’s still showing signs of life. Capital values ticked up by 0.1% in July, with shopping centers performing the best, increasing by a healthy 1.2%. Rental values are also up 0.1%, driven by shopping centers and retail warehouses.
Office Market Shows Signs of Recovery
The office market is still a bit of a mixed bag, but there are some positive signs.
- Office: Capital values dipped by 0.2% in July, but the rate of decline is slowing. Central London held steady, while outer London and the rest of the UK saw small dips. The good news is that rental values are climbing, up 0.2% for the month.
Overall Picture – Cautious Optimism
The overall picture is one of cautious optimism. While the office market is still adjusting, the industrial and retail sectors are showing healthy growth.
Experts Weigh In
Jennet Siebrits, Head of UK Research at CBRE, says, “UK real estate investment activity rose slightly during Q2 and sentiment has strengthened for real estate lending, suggesting that the market is heading in the right direction once again.”
Key Figures
- All Property: Capital values up 0.1% in July.
- Rental Values: Up 0.3% across all property types.
- Total Returns: Up 0.5% for all property types.
What This Means for Investors
This data suggests that the UK property market is starting to recover, with strong growth in the industrial and retail sectors. Investors may want to consider these sectors for potential returns. However, it’s important to remember that the office market is still in a state of flux and may require further observation.