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First commercial property value rise since 2007

Rental values continued to decline across all property sectors, although firming yields more than cancelled out the impact on valuations.

Retail warehouses saw the largest increase in values in July, with a rebound of 1.2%, producing total returns close to 2% for the month.

David Wylie, Head of Economics & Forecasting at CBRE said: "This month’s Monthly Index results reveal the undoubted seachange in investor sentiment that has taken place over the past month. The strong appetite for prime assets appears to have broadened out sufficiently to allow a stabilisation and improvement in the wider market.

"Although concerns remain over the near-term prospects for secondary assets with weaker covenants, this month’s figures seem to confirm that investors have awoken to what is now widely being seen as a once-in-a-generation buying opportunity."

The CB Richard Ellis Monthly Index showed:

* All property total return was +0.8% in July, but down –8.7% in the year to date for 2009;
* Capital values at the All Property level rose by 0.2% in July, the first rise since June 2007;
* All Property rental values declined by -0.4% in July, a slowdown on June’s -0.9% figure;
* Rental growth declined by -6.9% in the year to date or -9.3% annually;
* All Property equivalent yield remained unchanged over the month at 8.3%.

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