At the All Property level, UK commercial property capital values increased 0.1% in October, according to the latest CBRE UK Monthly Index. Rental value growth was flat for the third consecutive month. All UK Property total returns for the year to date reached 6.3% in October.
Industrial sector capital values increased 0.7% in October, pushing capital growth for 2018 so far into double digits at 10.2%. Contrasting previous months results, capital growth in Industrials in the Rest of UK (0.8%) slightly outpaced those in the South East (0.7%). Rental values increased by 0.2%.
Capital values in the Office sector increased 0.4% over the last month, driven by growth of 0.8% in the Rest of UK markets. Central London Office capital values increased 0.2% in October, while values rose 0.3% in Outer London/M25. Office capital value growth reached 2.5% for the year to date in October. Rental value growth for the sector was 0.2% in October, with City and Outer London/M25 Offices reporting flat rental values. All other submarkets recorded rental growth in line with the sector average.
Retail sector capital values decreased -0.6% in October. Capital values in Rest of UK High Street Shops fell -0.7% over the month while values in the South East were flat. Retail Warehouse capital values decreased -0.6% in October. The Retail sector’s October results were pulled down by a decrease of -1.2% in Shopping Centres. Shopping Centre capital values have fallen -6.8% in 2018 so far, bringing year-to-date total returns for the subsector to -1.9%. Retail sector rental values fell -0.2% over the last month.
Robin Honeyman, Research Analyst at CBRE UK, said: “With the notable exception of Shopping Centres, income returns have helped keep Retail sector total returns positive in 2018 so far. However, double-digit returns for the year-to-date in the Industrial sector continue to boost All Property results and conceal the divergent fortunes of the two sectors.”