According to the latest report from CBRE, the UK has suffered a substantial drop in the commercial property market, as values have fallen by 0.2%, making a buyers’ market imminent as a result of the decline over recent months.
In 2011, £33.4 billions of property was exchanged, but office, retail and industrial property sectors have all noted a 0.2% fall.
Central London has seen its first decline after a two year increase which has “caused a softening in overall office performance this month, as the counter buoyancy effect of a strong central London office market has stalled”, according to the report.
Offices within the rest of the UK have also noted a decline with values falling by 0.4%. The retail sector has also suffered a notable lack in business too, seeing returns of 0.2% over the first month of 2012, down from 0.4% the previous – a fall in value of 0.2%.
The weakest sub-sector in January proved to be shopping centres, as capital value showed a fall of 0.5%. Retail warehouses saw a decline from 0.7% in December to 0.4% on their monthly returns. High street shops experienced a slight increase in January, although their values still fell by 0.1% with total returns of 0.3%.
Occupier markets saw no major deterioration, although a fall in rental values was noted throughout January – down by 0.1%, and by 1.2% throughout the last year. Shopping centres had a decrease of 0.1% in rents, while retail warehouses maintained stability in January as this space is considered to be in short supply.
Further decline was illustrated within occupier and investment markets, as capital values fell 0.2%, with total returns of 0.3% being delivered. As a direct result of issues surrounding the Eurozone, a gradual decline in performance is evident over the past four months.
There has also been a fall of 0.3% in rental values in January 2012 – notably the weakest month since September 2011.
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