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Recent reports and analysis show that by last month commercial property values in the United Kingdom increased for the tenth month in a row.
Investment Property Databank’s figures demonstrate that the average value of commercial property, including retail, office and industrial space, went up to 0.6% in February compared with January, with a total return – which takes into account capital value and rental income – of 1.1%.
The report also indicated that the biggest climbs are in the industrial and office sectors, with retail a way behind due to the challenges of the economy, and probably the bricks-and-mortar versus the online space challenges. Offices and warehouses experienced a growth of almost double that of retail space over the last year, with the former at 0.9% and the latter at 0.2%. May 2013 seems to be the significant month in which rental properties began to provide positive investment back to their owners.
IPD stated that, for once, it was the regional figures that influenced the average in an upwards direction, rather than London as is often the case – and which is certainly the case at present in relation to residential property figures – as London’s asset growth slowed a little while the values of commercial space in the regions is increasing after the years of economic downturn.
Investors have not been slow to notice this and some are venturing away from the capital in order to see better returns on their cash, although the regions will not necessarily be seen as the ‘safe haven’ that London became in the recent troubled economic times.
With the interest rate remaining low and seemingly continuing to do so for some time, it is quite possible that this rise in asset value will also continue.
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.