UK shopping centre rents fall further as industrials dazzle
The UK’s industrial sector outperformed all other sectors again in the fourth quarter, but shopping centre rents continued to fall.
In Q4, prime rental growth for industrials was 1.5% according to CBRE, while the property market as a whole saw average rental value growth of 0.3% for the quarter and average prime yield came in at 5.6%.
It is the thirteenth consecutive quarter that industrials have outshone all other sectors. In London, the sector saw growth in prime rents at 2.6%, compared with 2.1% the previous quarter. In the rest of the UK, prime rents increased by 0.7%, driven by activity in the West Midlands where prime rents increased by 2.7%.
The UK’s industrial sector outperformed all other sectors again in the fourth quarter, but shopping centre rents continued to fall.
In Q4, prime rental growth for industrials was 1.5% according to CBRE, while the property market as a whole saw average rental value growth of 0.3% for the quarter and average prime yield came in at 5.6%.
It is the thirteenth consecutive quarter that industrials have outshone all other sectors. In London, the sector saw growth in prime rents at 2.6%, compared with 2.1% the previous quarter. In the rest of the UK, prime rents increased by 0.7%, driven by activity in the West Midlands where prime rents increased by 2.7%.
Over the last 12 months, industrials prime rents increased by 5.8% at the national level, with London, West Midlands and North West recording rental growth above the average.
Industrials also recorded the greatest fall in yields in Q4 at -11bps, mainly driven by London and South East.
In contrast, prime rents for all retail sectors continued to fall, with shopping centres registering the biggest drop (-1.3%) during the quarter. All regions across all retail sectors recorded either falling or flat rents.
While prime yields for high street shops remained unchanged, shopping centre and retail warehouse yields weakened and increased considerably over the quarter (37bps and 33bps respectively).
In the office sector rents continued to rise, recording growth of 0.6% for the quarter and 2.6% for the year. Central London offices saw average growth of just below 0.5%. In contrast, offices in the rest of UK (excluding Eastern and South East) rose by 0.9%.
Prime yields for the office sector decreased by -2bps over the quarter, with Midtown and Southbank recording a -12bps yield shift.
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