Commercial property continues growth – CBRE

All Property rental values were broadly flat over the month, being down only 0.1%, a possible early indication that demand in occupier markets may be becoming more positive.

David Wylie, Head of Economics and Forecasting at CBRE, said: "January’s 1.5% total return marks an unsurprising moderation in the commercial property market’s recovery in what is often a quieter month in the property calendar.

"The breakneck pace of capital appreciation seen in the closing months of 2009 has moderated, but given the breadth and depth of investor demand currently seen in the market, total returns look set to re-accelerate in the coming months."

The CB Richard Ellis Monthly Index showed:

* The All Property total return was 1.5% in January, with annual returns up to 8.6%;
* All Property capital growth moderated to 0.9% in January, down from the record 3.3% increase recorded in December;
* The strongest performing market sub-sector over the month was Central London offices, which recoded total returns of 2.2%;
* All Property rental values fell only marginally by 0.1% in January, significantly less than the monthly falls seen in the last quarter;
* All Property equivalent yields were broadly flat over the month, remaining more or less unchanged at 7.3%.

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