UK - The commercial real estate market in the UK is on the verge stagnating as yields and rents show very little movement, according to Investment Property Databank (IPD).

Latest figures from the IPD UK Monthly index show capital growth rose only fractionally in the first month of 2011, at 0.1%, while rental growth edged just below zero.

Total returns for January were 0.7%, helped by an income return of 0.6%.

Property yields were stable for the fifth consecutive month, at 7.4%.

The influence of yields on capital values, as measured by yield impact, slipped to 0.2%.

Capital values in the UK have risen by 6% over the past 12 months, although the equivalent figure was 6.9% a month ago.

Phil Tily, managing director for UK and Ireland, said: "It's a case of 'new year, old story' for the first IPD UK monthly performance figures for 2011.

"At the headline level, the UK commercial property market could continue to remain lacklustre over the months to come, masking a polarisation of market performance by geography and asset yield profile."

With the UK market results now released, IPD is working toward the launch of its UK benchmark for the UK.

The company is reviewing the full annual universe of participating funds and will initiate the debate on the ranges of fund returns and drivers of portfolio performance in 2010.