JLL: UK property returns 4.3% in Q3

FINANCE: UK commercial property returned 4.3% in Q3, slowing from the 4.6% recorded in the previous quarter, according to data from JLL. Capital values continued drive growth in Q3, but at a slower rate than the previous quarter, rising by 2.7% compared with 3%. Property has achieved a total return of 19.1% in the first three quarters of the year, of which 11.7% is capital value appreciation. Yield compression continued in the third quarter, standing at 6.2%, compared with 6.6% in Q2. London outperformed the UK with an average total return of 4.9%, compared with 3.9% for the rest of the country. Secondary property outperformed prime for the third consecutive quarter, at 4.8%, compared with just 4.2% for prime assets. Andrew Burrell, head of forecasting at JLL, said: “The UK seems resilient to current global jitters and there is further evidence that investors are moving along the risk curve from the yield compression in secondary assets. If this performance continues in Q4, returns in 2014 will hit a post-crash high of close to 20%.” sophia.furber@estatesgazette.com