The CBRE Retail team knows retail property. Our teams cover retail agency, out of town, shopping centres, lease consultancy and capital markets as well as corporate occupier services, research and consultancy. Based in the west end of London we have an extensive team covering central London retail as well as offices across the rest of the UK specialising in local retail knowledge.
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According to the latest CBRE Monthly Index, total returns for All Property were 2.1% in June. Capital values increased by 1.6% over the month.
Central London offices outperformed again, with a total return of 2.4%, driven by strong growth in June of 2.1%. Outside of Central London, capital values also continued to increase, however at a slower rate than in the previous month.
The biggest contributor to the strong retail performance was shopping centres, which recorded 2.9% capital value growth. Capital values for high street shops and retail warehouses increased by 1.1% and 1.5% over the month.
CBRE's Neil Blake and Graham Barnes analyse the latest macroeconomic and capital markets factors that shape and influence commercial real estate markets in the UK, providing two views of one world.
This month in An Economist and A Financier: Optimistic summer outlook with corroborating evidence in the property market. But is there a danger of complacency? Threat from high interest, stuttering growth outside the UK, the continued weakness of public finances, weak wage growth, sluggish bank lending to companies, deflation and the lack of evidence of rental growth outside of London and the Greater South East are some of the concerns worth thinking about.
YIELD IMPACT DRIVING THE PERFORMANCE IN THE REST OF UK
UK commercial property recorded yet another strong overall performance in May. Total returns for All Property were 1.8% in May and 6.8% over the year to date. Capital values increased by 1.3% over the month and to the end of May this year capital values have recorded growth of 4.1%.
Total returns for All Offices were 1.9% in May, with capital values increasing by 1.4% over the month.
In the Rest of UK, yield shift is by far the biggest contributor to capital value growth, with increasing rental values playing only a small part. In contrast, rental value growth in London and the South East is making an increasing contribution.
The Retail sector continues to improve, recording a total return and capital value growth of 1.7% and 1.2% respectively. Although capital values are increasing, rental values continued to fall in May.