UK prime commercial property rental values grow 0.6% in Q3 Rental values for UK prime commercial property grew by 0.6% in Q3 2016. 7% of CBRE monitored locations recorded increasing rents, while 1% recorded decreasing rental values. Prime yields for All Property both remained relatively flat despite the uncertainty following the EU Referendum result, at 5.5% in Q3.
UK commercial property rental values stable, capital values rise slightly Capital value growth for All Property in October 2016 was 0.1%, with total returns rising to 0.5%. Rental values remained stable in the last month. The Industrial sector performed the strongest, reporting total returns of 0.7% and capital value growth of 0.2%. Capital values were stable for both the Office and Retail sectors
Take-up in Central London for October 2016 was 0.4m sq ft, a fall of 62% on the previous month and below the 10-year average of 1m sq ft. Availability remained unchanged in October, standing at 13.7m sq ft, 6% below the 10-year average of 14.6m sq ft. Under offers increased by 12% in October to stand at 3.3m sq ft, remaining ahead of the 10-year average of 2.8m sq ft. The largest deal of the month saw Halkin Properties acquire 59,900 sq ft at 1/2 Paris Gardens, SE1.
We are pleased to launch the first Property Perspective for Retail. This bi-annual report covers the latest information and activity within the Retail sector. Regular features will include a Retail Outlook and market insight covering all Retail sectors including; UK Retail Investment, High Street, Central London Retail Leasing, Shopping Centres, Retail Parks, Supermarkets and Food & Beverage. Read the full report for insights on: Retail Outlook: The UK Government and population are coming to terms with the decision taken on 23 June to leave the European Union. UK Retail Investment: Following the referendum market conditions remain uncertain as clarity is sought on future negotiations. High Street: The UK High Street continues to perform well. Those High Streets that thrive are ones that have shown a willingness to be flexible. Feature on Edinburgh: A spotlight on the Retail outlook in Edinburgh. Central London Retail Leasing: It was largely business as usual ahead of the EU referendum as retailers continued to acquire stores through Central London. Shopping Centres: Prime UK Shopping Centres continue to perform well. Average rents in the UK’s ten largest prime Shopping Centres have increased since H1 2015. Retail Parks: Vacancy rates on Retail Parks continue to be significantly lower than Shopping Centres and High Streets. Supermarkets: UK shoppers continue to benefit from cheaper prices in UK Supermarkets due to continued deflation. Retail & Logistics: The role of the store is changing. Many retailers recognise this. Rather than fighting against showrooming they are encouraging it. Shopping Centre Management: A spotlight on Shopping Centre events that increase footfall at Manchester Arndale. Retail Revaluation: Excluding London, retailers in nine out of thirteen main cities will see their average rateable values fall in the 2017 business rates review.
Our first post referendum vote release of yields is set out below. • Immediately after the vote, the sector was marked out as one that would be comparatively robust. Whilst values have slipped in most commercial markets over the last 3 months, the residential investment sector seems to be holding its own, albeit with lower levels of activity and some weakening in secondary markets. • Manchester continues to appeal to investors with LaSalle announcing its acquisition of Greengate, M&G forward funding its first scheme in the region at Port Street plus Glenbrook/Moorfield and Delph also making acquisitions. • Other headline activity saw the Europa Capital & Addington Capital Joint Venture acquire Velocity Village in Sheffield and L&Q forward fund a scheme in Acton. • The possibility remains of potential deal renegotiations pushing yields outwards in secondary locations over the next 3 months.