After an encouraging start to the year for UK commercial property in January, capital values continued to increase in February, growing by 0.6% over the month.

After an encouraging start to the year for UK commercial property in January, capital values continued to increase in February, growing by 0.6% over the month.

As a result, total returns were 1.1% for All Property, according to CBRE's latest monthly index.

All the main sectors experienced positive growth in capital values, with All Offices and All Industrials continuing a strong upward trajectory. In the retail sector, capital values continued to improve, increasing by 0.1% over the month.

Total returns for All Offices were 1.4% in February, with capital values increasing by 0.9% over the month. Central London offices were again the strongest segment, with West End and Midtown offices in particular showing strong capital value growth. Offices across the country also have been contributing to the overall performance, although returns outside the capital were not as strong as in the Central London markets.

CBRE researcher Aleksandra Starczynska commented: 'The main driver of performance in the UK commercial property market in recent months has been good secondary property, with a noticeable narrowing of the yield spread with prime. A distinct difference is appearing at the sector level too with retail underperforming relative to offices and industrial.'

The full report is attached below.

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