ffices were the top performing sector, with capital growth of 0.6% and total returns of 1.1%. Industrial was the weakest performing sector, with total returns of 0.6% and neutral capital growth.
All retail sub-sectors saw positive capital growth, with standard retail and retail warehouses growing 0.3% and shopping centre values growing by 0.2% in the month.
All Property rental values were flat in September, with growth in some occupier markets offsetting continuing declines elsewhere.
Nick Parker, Senior Analyst with CB Richard Ellis, said: “UK office markets are being driven by the outperformance in Central London offices. This is where investor interest is most focussed, and where there are still signs of downward yield pressure. There is very little evidence that markets outside of London are likely to see any more significant upside in pricing for the time being.
“UK commercial property values have grown by 7.9% during 2010 and by 19% since June 2009. However, property values still remain 33.3% below their 2007 peak. Interestingly, the yield gap between property and government bonds hasn’t narrowed by as much as during previous cycles, with an approximate 400 basis point positive yield gap at present. This underlines the fact that the current risk premium remains elevated due to ongoing concerns over growth prospects and worries about income security in many occupier markets.”
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