Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Commercial property values across the UK have fallen by an average 2% over the 12 months to June 2001, according to the latest Insignia Richard Ellis monthly index. This is the steepest dtp since August 1996, reflecting a continued softening in market yields.

Retail continues to be the worst-performing property sector, with values down 7.1% on the year. However, the worst could be over for retail investors as the rate of decline actually improved since may 2001, when a year-on-year fall of 7.5% was registered.

Office capital values fell during June although values are still 2% higher than they were the previous year. And capital growth for industrials slowed to 1.5% year-on-year.

The decline in capital values is due primarily to yield movements, and annual rental growth for all property actually rose over the past month to 5.9% per annum. Office rental growth rose to 12.4% and industrials to 3.8% per annum. Growth in high street retail slowed to 1.8% per annum while out-of-town retail growth remained static at 1.5% per annum.

Combining the two, total returns on all property fell back to 5.2% in June from 5.4% in May. Total returns on offices fell to 9.6%, the lowest figure seen since January 1997. Industrial returns slowed to 9.4% and high street retail total returns in the year to June were -0.7%.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.