Rental values increased 0.1% on average across UK commercial property in January 2018, according to the latest CBRE Monthly Index. The traditional steady start to the year saw capital value growth slow, from 1.0% in December, to 0.2% in January.
The Industrial sector continued to provide a boost to overall results, outperforming the other main sectors with capital growth of 0.7% in January. Growth in the Industrial sector was strongest in the South East with capital values increasing 0.8% and rental values up 0.4% over the month. Industrials in the Rest of UK reported capital growth and rental growth of 0.4% and 0.1% respectively.
Retail capital values were stable in January, held up by Shops in the South East (0.3%) and Retail Warehouses (0.0%). Both Shopping Centres and Shops in the Rest of UK reported capital value falls of -0.1%. Rental values in the Retail sector increased 0.1% over the month. Retail Warehouse rental values increased 0.2% while Rest of UK Shops reported a decrease of -0.3%.
Capital values in the Office sector increased 0.2% over the month, with all markets performing in line with the sector average. Rental values decreased -0.1% across the sector, pulled down by falls of -0.1% in both Central London and Rest of UK Offices.
Miles Gibson, Head of Research at CBRE UK, said: “It was a typically slow and steady start to the year, although it was unlikely January’s results would exceed December’s impressive results. Commercial property surpassed expectations in 2017 with double-digits returns. With crunch time for Brexit approaching and a slightly weaker economic outlook, the year ahead will undoubtedly have its fair share of excitement.”