Shopping centres bottom out as industrial continues to climb
Industrial continues to lead growth across CBRE’s monthly all-property index, with value up by 2.1% in October – the sector’s fifth month of 2%-plus capital growth.
Industrials in the South East saw stronger capital growth than those in the rest of the UK, with increases of 2.3% and 1.7% respectively. All industrial rental value growth was 0.8% for the second consecutive month. Industrials in the South East reported rental values rising in line with the sector average, while in the rest of the UK growth was slightly weaker at 0.7%.
Industrial total returns for the month were 2.4%.
Industrial continues to lead growth across CBRE’s monthly all-property index, with value up by 2.1% in October – the sector’s fifth month of 2%-plus capital growth.
Industrials in the South East saw stronger capital growth than those in the rest of the UK, with increases of 2.3% and 1.7% respectively. All industrial rental value growth was 0.8% for the second consecutive month. Industrials in the South East reported rental values rising in line with the sector average, while in the rest of the UK growth was slightly weaker at 0.7%.
Industrial total returns for the month were 2.4%.
Retail warehouses continued to buoy the retail sector, with a 1.7% capital growth in the sub-sector enabling retail capital values as a whole to edge up by 1%. But there was good news too in the depressed shopping centre market, with a 0.2% increase in capital values – the first positive growth in the sector since August 2017.
Retail rental values rose 0.3% over the month, driven mostly by 0.9% growth for high street shops, where a strong performance from a limited number of assets pulled up the average. Retail total returns were 1.6%.
The office sector reported the smallest increase in capital value, up by just 0.4% in October, according to CBRE. Central London offices posted capital growth of 0.2%, with 0.3% and 0.1% growth reported in the City and West End respectively. Offices in the rest of the UK posted the strongest performance of the month with 0.6% growth. All office rental values were unchanged over the month. However, this does not reflect the difference between Central London (-0.1%) and rest of the UK (0.1%).
Office total returns were 0.7%.
Overall, capital values increased 1.1% across all UK commercial property in October 2021, with rental value up by 0.3% and total returns of 1.5%.
Toby Radcliffe, research analyst at CBRE, said: “October has been another month of robust growth at the all-property level, reflected in growth across every sub-sector of the index for the first time since August 2017.
“Notably, values for shopping centres, the only subsector in recent months to continue reporting falling values, may have now reached a trough.”
To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews
Image © EFAFLEX_Schnelllauftore/Pixabay
