All property total returns for the IPD's UK Monthly Property Index fell by -1.5% in June , more than twice as much as in May when all property total returns slid -0.7%. The decline in capital growth increased markedly to -2.0% from -1.2% in May, with the pace of re-pricing resuming a speed not seen since January of this year. Income return remained largely unchanged at 0.5% month-oin-month. Nevertheless, All Property rental growth remained in negative territory for the second consecutive month at -0.04% month-on-month.
All property total returns for the IPD's UK Monthly Property Index fell by -1.5% in June , more than twice as much as in May when all property total returns slid -0.7%. The decline in capital growth increased markedly to -2.0% from -1.2% in May, with the pace of re-pricing resuming a speed not seen since January of this year. Income return remained largely unchanged at 0.5% month-oin-month. Nevertheless, All Property rental growth remained in negative territory for the second consecutive month at -0.04% month-on-month.
On a rolling 12-month basis, the all property total return has now hit a record low at -14.9%. Aside from the past few months, the worst annualised decline for the monthly index occurred in April 1991, when the index showed an annualised drop of -8.1%. All sectors edged lower in June. Retail, which suffered the worst downturn, fell -1.9%, compared with a fall of only -0.7% in May. Total returns from Offices and Industrials fell to -1.27% and -0.69% from -0.92% and -0.52% respectively.
The accelerating downward pressure on returns primarily reflects adverse yield adjustments, according to Ian Cullen, director and co-founder of PD. 'Rental value movement, though negative for the second successive month, remains barely measurable.'
The IPD UK Monthly Index measures returns to direct investment in UK commercial property. The Index is compiled from valuation and management records for individual buildings in complete portfolios, collected direct from investors by IPD.
