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Commercial property enjoys capital growth – CBRE

All Property rental values continued to decline, with a fall of 0.2% suggesting that occupier markets are still under pressure. However, Central London offices recorded flat rental growth in February, pointing towards firmer occupier demand in the capital.

Nick Parker, CB Richard Ellis Economics and Forecasting Analyst, said: "The general sentiment in the market currently is that property is approaching fair value, with ongoing yield compression expected in the short term.

"While it was prime yields that came back in most aggressively in the latter half of last year, it is the better secondary markets that are slowly starting to attract interest at the beginning of 2010, with investors beginning to look further up the risk curve in a hunt for better returns. It is widely expected that the yield gap between prime and secondary property will slowly narrow over 2010 as competition for good secondary assets becomes more heated."

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