The rents of commercial property in the UK grew by 3.7 per cent during 2016, according to CBRE’s latest Prime Rent and Yield Monitor. Though it is lesser than 2015 (5 per cent growth), it is still significant in the wake of political and economic developments that led to speculations on the property market in the UK. It is a relief to note that the market has returned to normalcy and delivered returns to investors.
During the last three months of 2016, the commercial rental values increased by 0.4 per cent with the industrial sector accounting for the biggest growth (1.1 per cent). As always, London continued to outperform other locations with prime industrial prime rents increasing by 2.8 per cent during Oct-Nov-Dec 2016.
Overall, the industrial sector witnessed the largest growth in prime rental sector for 2016 at 6.5 per cent. It was followed by high street shops (5.4 per cent). The prime rental growth in the office sector remained flat during 2016.
The findings from CBRE show that investors continue to gain attractive returns on investment in commercial property in the UK. The investment into the commercial property market continued at an expected pace in 2016 and the rentals are poised for growth in 2017.
Despite 2016 being characterised by uncertainty in the UK’s political and economic landscape, prime commercial property sector has again shown its resilience with positive, albeit easing, growth in prime rents across all main sectors. The Industrial sector in particular has helped steady the ship throughout 2016, outperforming the national average in every quarter - Miles Gibson, Head of UK Research at CBRE