UK commercial property returns 8.2% in 2017 so far

Total returns on commercial property in the UK have risen to 8.2% in 2017, according to the latest CBRE monthly index.

In Q3 2017, total returns for commercial property reached 2.7%.

Commercial property values increased 1.4% in Q3 2017, up from 1.2% in Q2 2017 and 1.3% in Q1 2017 thanks to a quarter-end surge from the industrial sector.

Capital values across the UK commercial property market increased 0.6% in September.

Rental values increased by 0.4% in Q3, up from the 0.3% recorded in Q2.

Miles Gibson, head of UK research at CBRE, said: “The industrial sector continues to be the belle of the ball in 2017, with short supply and high demand resulting in strong performance.

“Despite the falling rental values reported in central London offices, overall results continue to show steady performance in the UK property market.

“Our index shows total returns of 8.2% for the year so far, already ahead of the IPF’s August consensus forecast of 6.7% for 2017 as a whole.”

Capital values in the office sector as a whole increased by 1% in Q3, but decreased by 0.2% in the City.

This was offset by a 1.1% increase in the outer London/M25 region and a 0.7% rise in the rest of the UK.

Rental values for the office sector fell by 0.1% overall and by 0.4% in central London.

Rental values for offices in outer London/M25 and the rest of the UK increased by 0.5% and 0.2% respectively in September.

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