Perhaps more surprising than retail overtaking office performance this month, was shopping centre performance being better than Central London offices, breaking 14 months of outperformance for offices in the capital.
Shopping centres saw capital values grow by 1.5% with total returns of 2.0%, while Central London offices turned in a solid 1.1% capital growth and 1.5% total return, maintaining their strong performance for another month.
Meanwhile Rest of UK offices maintained its position as the weakest performing sub-sector, with values down 0.3% and only marginally positive total returns of 0.2% this month thanks to the income return.
David Wylie, Head of UK Economics and Forecasting, CBRE, said: "Performance of commercial property in March was surprisingly robust after a more tentative start to the year. The most encouraging factor in this month’s figures is that improvements in occupier markets are beginning to be seen in a number of sub-markets, notably Central London offices and retail warehouses, and this is helping to drive valuations ahead, reducing the reliance on further yield compression.
"Looking at the distribution of returns, it is interesting to note the wide spread of capital value movements over the month, with almost as many properties continuing to see values fall as rise. The strong upward movement in values is predominantly due to growth in higher value and prime property, while smaller and more secondary assets continue to underperform."
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