Values for commercial property in the UK have stopped declining, after decreasing for 17 consecutive months, according to a new report by Investment Property Databank (IPD).
April saw real estate values halt for offices, stores and warehouses, compared to March figures, after they had fallen for 17 months in a row. Total return for investors, which joins changes in both rental income and estate values, was at 0.5 per cent in April, staying at the same figure as the previous month. Specifically, office blocks saw a rise in their values by 0.1 per cent, but both warehouses and retail lot saw their values drop by 0.1 per cent, creating a very flat picture by the end of the month.
Phil Tily, a managing director at IPD, said in the statement: “There are positive signs emerging in the UK property market, which sit alongside more optimistic reports about the UK economy. In the first quarter, we saw a growing percentage of assets outside of London, delivering flat or positive capital growth, and that trend has continued in April.”
This news follows the announcement by Bank of England governor Mervyn King yesterday (May 15th), which revealed that economic recovery was just around the corner for the country. For the first time in five years, since the global financial crisis hit in 2008, Mr King was able to forecast positive growth and an improvement on inflation, even if companies are still hesitant in moving into new office blocks outside of the capital city. Furthermore, consumers are still spending less money than they were five years ago, meaning that retail sales are still suffering.
The results are based on an IPD Index, which takes into consideration 3,355 properties from all across the UK, valued at a total of £31.4 billion.