Capital values fell by -0.2% across UK Commercial property in March 2019, according to the latest CBRE Monthly Index. Rental values were flat and total returns were 0.2%. In Q1 2019, capital values fell by -0.6%, while rental values were stable. All property total returns were 0.7% for the quarter.
The Retail sector suffered further falls in March 2019 with a -1.2% decrease in capital values. Capital values, rental values and total returns were all negative again for the seventh consecutive month. Shopping Centre capital values fell once again (-2.5%). High Street Shops reported the second biggest fall in capital values since July 2016 (‑0.7%). Retail warehouse capital values fell ‑0.8% and rental values were flat. Total returns for the Retail sector in Q1 2019 were -1.3%, driven by a -2.8% decrease in capital values. Rental values were ‑0.9% in Q1 2019.
The Office sector recorded capital value growth of 0.4% over the last month. March 2019 recorded rental value growth of 0.3% and total returns of 0.8%. Outer London/M25 Offices recorded flat capital values over the month, while capital values in Central London and the Rest of UK increased 0.4% and 0.6% respectively. Office capital values rose 0.7% in Q1 2019, and fed into total returns of 1.8%, roughly on par with the Industrial sector. Office sector rental values increased 0.4% over the quarter.
For the first time in 21 months, the Industrial sector was not the best performer of the main sectors in March, with capital values increasing 0.2% over the month. Rental values increased 0.3%. But over the quarter, the Industrial sector was the best performer of the main sectors, with capital values increasing by 0.7%, rental values increasing by 0.8% and total returns of 1.9%. In Q1 2019, South East Industrials reported an increase in capital values of 1.2% while Industrials in the Rest of UK reported growth of 0.1%.
”Results for the first quarter of 2019 mirror the trends reported so far this year and throughout 2018. The Office and Industrial sectors have maintained a steady course compared with the turbulence experienced in the Retail sector. Overall, results for Q1 2019 were less positive that those reported for the same period in 2018.” said Robin Honeyman, Research Analyst at CBRE UK.