The UK property market delivered a total return of 2.2 per cent during the last three months of 2016 with the Industrial sector being one of the growth drivers, said MSCI Inc, one of the leading provider of research indexes and analytics.
The IPD UK Quarterly Index released by the MSCI Inc observed that the property returns during the last quarter (Oct-Dec) of 2016 was the highest for the entire year. This is an encouraging development as the returns were around +1.4 per cent and -1.2 per cent during the first three quarters of 2016 in view of UK’s exit from the EU and its impact on the economy. It means that normalcy is returning to the market and investors can expect good returns in 2017.
The Industrial sector posted the highest growth at 7.3 per cent much ahead of the other two main sectors – Office (2 per cent) and Retail (1.7 per cent).
The rental sector has remained stable registering a healthy growth of 2.1 per cent during the last quarter of 2016. The income returns also remained stable at 4.9 per cent during all the 4 quarters of 2016.
To summarise, though the impact of Brexit was felt on the UK property sector during 2016, the market bounced back towards year-ending, indicating that the fundamentals of the nation’s real estate market are strong.
The last quarter of 2016 showed a rebound after the negative adjustment in the third quarter following the EU Referendum: Will Robson, Executive Director, MSCI