Commercial property sector continues to improve

A recent report undertaken by CBRE, under their UK Monthly Index is showing that in the month of July the performance within the commercial property sector has continued to improve. Capital values have apparently increased by 0.4% which is now the fourth consecutive month of positive growth.  

The office sector actually drove this increase, with all offices recording a capital value growth of 0.8% which provided a total return of 1.3% during the month of July. As usual, central London headed this growth with a total return of 1.6%, which was driven by a capital value growth of 1.2%. The value growth of offices in Midtown and the West End proved to be the best performing locations and recorded and even further capital value growth of 1.5% and 1.2%. 

Even though central London is the main driver for commercial growth, in particular office space, we are also noticing an increase in revenue just outside of London, offices in outer London along the M25 corridor managed to record a return of 1.3%. 

The fact that outer London’s revenue return has increased might suggest that some companies are finding central London just too expensive and may be moving to more affordable locations, whilst the growing capital values of 0.6% over the past month can also be taken into account. There has however been a decline in capital value of -0.1% in the rest of the UK. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.