According to the CBRE monthly index, capital values increased 1% across all UK commercial property in July 2021.This marked the largest growth in property values since 2014, by comparison July saw rental values rise 0.2% with total returns at 1.4%.
Despite the work-from-home phenomenon, the UK’s office sector saw capital value growth and rental value growth 0.2%. This overall increase was predominantly outside of central London, which saw values remain the same, whilst developments in other areas of the UK saw a rental growth of 0.5% and capital value growth of 0.3% (a significant increase on June’s -0.2%).
Unsurprisingly, retail warehousing saw the biggest rise with a record monthly increase of 2.1%. Retail as a whole, experienced a much-needed rise of capital values of 1.1% although shopping centres specifically dipped 0.3%. Rental values in this subsector also saw a 0.2% decrease. The industrial sector capital value growth was 2.0%, slightly down from the 2.3% in June.
Paul Debney, Senior Associate – Commercial Finance at Sirius, comments; “With the roadmap out of lockdown now underway and the COVID19 vaccination programme continuing to prove very efficient, the commercial property market appears to be entering a period of sustained growth. The end of Brexit uncertainty at the start of the year has also helped, and this has resulted in a rebound in capital values .Offices and industrials, and distribution warehouses and quality multi let industrial estates remain highly sought after, whilst caution still remains within the retail sector, however the opening of non-essential retail in April, and indoor hospitality from May has added significant momentum”.