UK commercial real estate in March delivered the first positive investment returns since June 2022 as property appraisal values recovered after eight months of declines, according to MSCI‘s UK Monthly Property Index for March.
The rebound was led by an increase in values for residential, industrial and retail property.
The month on month total return in March was 0.67%, resulting from a 0.46% income return (i.e. from net rents) and a 0.21% capital return (i.e. from higher valuations of the properties).
Office values continued to fall as the segment comes under pressure from hybrid working trends and heightened risk of obsolescence.
MSCI says capital values fell faster during the current period of uncertainty than during the 2008 global financial crisis and late-1980s recession, but at just eight months, the slowdown is, as it stands, of much shorter duration.
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