Strong performance for commercial property capital values last month
New research from the CBRE reveals that UK commercial property capital values rose by an impressive 0.3 per cent last month.
By way of comparison, capital values rose by just 0.1 per cent in April, the real estate group’s CBRE Monthly Index reveals.
May’s strong figures were largely spurred on by strong performance in the industrials sector, where capital values were up by 1.3 per cent month-on-month, the report adds.
In the office sector, capital values were up by 0.2 per cent. However, in the retail sector, values were down by -0.3 per cent – marking the fifth consecutive month of falling capital growth in this sector.
The news comes at a time when reports continue to emerge of retailers struggling to attract consumer footfall, as the emergence of online markets continues to deter shoppers from venturing out onto the high street.
Meanwhile, the UK Government is facing increasing pressure to do more to support such retailers amid concerns that falls in consumer footfall are “killing” a huge part of Britain’s commercial property market.
Specifically, commentators and experts have warned that the Government ought to move to reform business rates.
Marcus Phayre-Mudge, who heads-up investment trust, TR Property, said that rates are increasingly growing too expensive for commercial tenants and that this continues to have a negative impact on overall valuations of retail premises.
Whether the Government will move to address such concerns remains yet to be seen.