Rental and capital growth increase in May, driven by London offices and UK industrial assets

Capital values for UK commercial real estate rose by 0.3% in May according to the latest CBRE UK Monthly Index. While this was a slight increase on April, it remains in line with the pattern of small, steady increases in capital value seen this year. Rental values also rose by 0.3% in May, while total returns for the month were 0.7%.

The Retail sector posted a total return of 0.6% in May. This was predominantly driven by an income return of 0.5%, as capital values increased by just 0.1% throughout the month. Standard Shops and Shopping Centre values increased by 0.2% in May, but Retail Warehouse values remained unchanged. Retail rental values remained flat throughout May.

Office total returns were 0.6% in May. Office capital values rose by 0.2% overall, with Central London capital values increasing by 0.9%. However, Outer London/M25 Office capital values fell 0.4% in May, while Rest of UK Office values remained flat. Office rental values rose by 0.2%, with Central London rental values recording the highest increase in rental values in May.

The Industrial sector recorded the highest month-on-month total returns for May, at 0.8%. Industrial capital values rose by 0.4% and Industrial rental values increased by 0.5%. South East Industrial assets recorded stronger capital value growth than Industrial assets in the Rest of the UK, but both industrial segments reported a similar rental growth.

CBRE UK Monthly Index Snapshot: May 2025