The post-EU referendum slide in UK commercial property values seemed to reverse in October, with a slight increase recorded in CBRE’s latest monthly index.
The advisory firm’s latest monthly figures show that there was slight capital value growth of 0.1 percent across its sample, which the firm suggested showed an “overall dissipation of the Brexit effect”.
Property values had fallen by 0.2 percent during September, a slower rate of decrease than CBRE recorded in August, when they fell by 0.5 percent. The sharpest fall in values came in July, in the aftermath of the referendum result, with a 3.3 percent drop.
The industrial sector was the driver of capital value growth during October. While values in the office and retail sectors remained flat, the industrial sector contributed to overall growth with a rise of 0.2 percent. Industrials also outperformed all other sectors in terms of total returns, recording 0.7 percent for the second consecutive month as a result of strong occupier demand and limited supply.
Overall, rental values across the UK remained stable in October and total returns increased from 0.3 percent in September to 0.5 percent in October.
“This month’s results suggest continuing stability within the market in October. Occupiers and investors continue to take stock of the current conditions but many sectors remain resilient to Brexit-related uncertainty for now,” commented Miles Gibson, head of research at CBRE UK.