UK commercial property values slip in February: CBRE

UK commercial property values slipped in February compared with January despite an improved performance from Central London offices, according to CBRE’s latest Monthly Index.

Total returns came to 0.1% as capital values fell by 0.4%, with valuations down across nearly all market sub-sectors. Offices in Central London bucked this trend with total returns of 0.5%, up from 0.3% in January. Outside London, shops, shopping centres and offices all posted negative returns.

Occupier markets appeared to be more stable in February with no overall change in rental values at the All Property level. However, renewed growth in Central London offices was largely responsible for offsetting declines across nearly all other parts of the market.

Nick Parker, senior analyst of Economics & Forecasting at CBRE, commented: ‘A general cooling in investor sentiment has been evident for the past nine months, but until recently, valuations haven’t been adversely affected to any great extent. Now, the power has shifted back to the buyers, but with this shift comes great opportunities for those that are able to act.’

Foreign investors less constrained by a tight domestic debt market are continuing to target and focus on the UK - primarily London, he added. According to the latest CBRE Real Estate Investor Intentions survey released last week, a third of investors said that London was the most attractive real estate investment market in Europe for 2012.