Prime business parks return 14%
Prime business park returned 14.1% in 2015, down from 21.8% the year before, according to the MSCI/ Strutt & Parker Business Parks Index.
Returns have continued to moderate in the first half of 2016, delivering a return of 3%.
Values increased by 7.8%, while income return was 5.9%. Prime parks saw a rental increase of 6%, the highest figure since 2000.
[caption id="attachment_867041" align="alignnone" width="570"] Business park returns. Source: Strutt & Parker[/caption]
Prime business park returned 14.1% in 2015, down from 21.8% the year before, according to the MSCI/ Strutt & Parker Business Parks Index.
Returns have continued to moderate in the first half of 2016, delivering a return of 3%.
Values increased by 7.8%, while income return was 5.9%. Prime parks saw a rental increase of 6%, the highest figure since 2000.
Business parks underperformed stand-alone offices, which returned 15% in 2015.
The report said despite the uncertainty hanging over the market before the referendum, H1 2016 investment volumes eclipsed the levels set in the same period in 2015 and 2007. However, the research predicts that the second half of 2016 is set to see a noticeable slowdown in trading volumes.
Andy Martin, senior partner at Strutt & Parker, said: “Although we should avoid marketing real estate as a bond-like investment, it is clear that attention is set to increase. Investors that focus on the needs of their tenants and don’t treat property as a ‘buy to forget’ asset will do well and real returns of 4% or more should be viewed favourably.”
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