Investors in prime commercial property in the UK have been making impressive gains with rents growing for the 5th consecutive year, a latest study reveals.
UK prime commercial property rental values increased by 0.7 per cent on average during the second half of 2017, according to CBRE’s Prime Rent and Yield Monitor. The Industrial sector again outperformed other sectors with 1.7 per cent rise in prime rents across the UK.
The Industrial sector recorded the largest increase in prime rental values of the main sectors in 2017. Industrials in the North East and Yorkshire & Humberside markets outperformed the rest of the sector with growth of 9.2 per cent and 9.0 per cent in prime rents respectively. Prime rents in the Office sector increased by 0.9 per cent during the third quarter of 2017.
The UK is witnessing record levels of investment in the commercial property market with London leading the list of regions. International investors, especially those from Hong Kong and China, have acquired prime commercial properties in London during the first 8 months of the year. While growth in rents and capital values of the commercial real estate assets have moderated, the investors expect long-term growth in London.
Q3 results show a continuation of the trends reported so far in 2017, notably the outperformance of the Industrial sector and Central London’s changing rental story. At a higher level, our Q3 results continue to demonstrate the resilience of the prime commercial property sector, although growth does look to be slowing slightly: Miles Gibson, Head of UK Research at CBRE