Press Release
Commercial property continues strong start to 2025, as capital and rental values rise in March
April 8, 2025
Media Contact
Head of External Communications
Capital values for UK commercial real estate rose by 0.3% and rental values rose by 0.4% in March according to the latest CBRE UK Monthly Index. Total returns were 0.8% during March, with commercial real estate providing a total return of 2.1% for Q1 2025.
Retail continues to be the best performing sector, with a total return of 1.0% in March and 2.8% for Q1 2025. Capital value growth for Retail was 0.4% this month, with Shopping Centres posting the highest increase at 0.5%. Retail Warehouse capital value growth was 0.4% in March, while capital values for Standard Shops rose by 0.3%. Rental values also rose for the Retail sector this month, with an overall increase of 0.2%.
Total returns for the office sector were 0.7% in March and 1.7% for the first quarter of the year. Capital values rose by 0.3% in March. This was mainly driven by Central London offices, where values rose by 1.0% overall. Capital values rose by 0.3% for Rest of UK offices, but they fell 0.5% for Outer London / M25 offices. Meanwhile, rental values rose 0.6% this month. Again, this was driven by Central London offices, with some high value assets recording large increases in March, leading the segment overall to record rental value growth of 1.7%.
The Industrial sector recorded total returns of 0.8% during March and 2.3% for Q1 2025. Capital values rose by 0.4% in March while rental values increased by 0.3%, with little variation in either capital value or rental value growth this month between South East Industrials and Rest of UK Industrials.
The UK commercial real estate sector has delivered solid returns for investors in the first quarter of 2025, building on the strong end to the previous year. Income return has been bolstered by the resumption of capital value growth, itself underpinned by rising rental values.
Nonetheless, the commercial property market still faces challenges. While performance has improved across the retail, office and industrial sectors in recent months, asset quality is still affecting how individual investments perform, with our latest UK sustainability index showing a widening gap in capital and rental values between more energy efficient and less energy efficient office properties.
| All Property | Office | Retail | Industrial | |
|---|---|---|---|---|
| Total Return | 0.8% | 0.7% | 1.0% | 0.8% |
| Capital Value Growth | 0.3% | 0.3% | 0.4% | 0.4% |
| Rental Value Growth | 0.4% | 0.6% | 0.2% | 0.4% |
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.co.uk.