Capital values fell by -0.2% across UK Commercial property in March 2019, according to the latest CBRE Monthly Index. Rental values were flat and total returns were 0.2%. In Q1 2019, capital values fell by -0.6%, while rental values were stable. All property total returns were 0.7% for the quarter.
The Retail sector suffered further falls in March 2019 with a -1.2% decrease in capital values. Capital values, rental values and total returns were all negative again for the seventh consecutive month. Shopping Centre capital values fell once again (-2.5%). High Street Shops reported the second biggest fall in capital values since July 2016 (‑0.7%). Retail warehouse capital values fell ‑0.8% and rental values were flat. Total returns for the Retail sector in Q1 2019 were -1.3%, driven by a -2.8% decrease in capital values. Rental values were ‑0.9% in Q1 2019.
The Office sector recorded capital value growth of 0.4% over the last month. March 2019 recorded rental value growth of 0.3% and total returns of 0.8%. Outer London/M25 Offices recorded flat capital values over the month, while capital values in Central London and the Rest of UK increased 0.4% and 0.6% respectively. Office capital values rose 0.7% in Q1 2019, and fed into total returns of 1.8%, roughly on par with the Industrial sector. Office sector rental values increased 0.4% over the quarter.
For the first time in 21 months, the Industrial sector was not the best performer of the main sectors in March, with capital values increasing 0.2% over the month. Rental values increased 0.3%. But over the quarter, the Industrial sector was the best performer of the main sectors, with capital values increasing by 0.7%, rental values increasing by 0.8% and total returns of 1.9%. In Q1 2019, South East Industrials reported an increase in capital values of 1.2% while Industrials in the Rest of UK reported growth of 0.1%.
Robin Honeyman, Senior Research Analyst at CBRE UK, said: “Results for the first quarter of 2019 mirror the trends reported so far this year and throughout 2018. The Office and Industrial sectors have maintained a steady course compared with the turbulence experienced in the Retail sector. Overall, results for Q1 2019 were less positive that those reported for the same period in 2018.”