Total returns in the commercial property sector rose from 0.5 per cent to 0.6 per cent from March to April 2013, according to the latest CBRE UK Monthly Index.
With an increase of 0.1 per cent, and the annual return also rising to 3.1 per cent for the year leading up to April 2013, it has been a good start of the year for the commercial sector.
Looking specifically into the data, total return for all offices had gone up to 0.5 per cent, with major boosts coming from office blocks in central London. Mid-town offices performed the best during the month, seeing a return for investors of 0.9 per cent, whilst capital value also grew by 0.5 per cent.
It was also good news for commercial properties outside of London, with their being growth in capital values; the first recorded rise in this sector since August 2011. Aleksandra Starczynska, analyst at CBRE research, said: “The performance gap between central London offices and other parts of the UK market has started to close over the last couple of months. Although it remains the best performing market segment, both rental and capital value growth has been slowing for central London offices and at the same time performance in other segments has been improving.”
It is important to note however that capital values across the entire sector had fallen by 2.8 per cent in the last year, meaning that the overall picture remained flat. In the rental market, the numbers were similarly sluggish, with only London offices experiencing rental values increases, with City and West End offices seeing rises of 0.3 per cent and 0.1 per cent respectively. The rest of the UK saw rental falls of 0.2 per cent however.