Commercial property market slows down in April

There was regional divergence in performance in April, especially in the office sector where the marked difference between a strong Central London office market and weakness in the regions was very apparent.

Central London saw total returns of 0.9% as values increased by 0.4%, the strongest subsector, while offices in the M25 / Outer London and rest of UK markets saw values continue to fall.

April UK Monthly Index snapshot:
* All property values rose by 0.1% over the month, producing total returns of 0.6%;
* Central London offices were joint top performing sub-sector this month along with retail warehouses, both recorded total returns of 0.9% and capital growth of 0.4%;
* Outer London / M25 offices were the weakest sub-sector in April, with returns of 0.2% after a capital decline of 0.4%;
* Shops performed in line with the All Property benchmark, with capital growth of 0.1% and total returns of 0.7% for the month, and after a strong month in March, shopping centres saw values fall by 0.3% as they returned just 0.2% over the month;
* Industrial returns weakened in April, with capital growth of just 0.1% leading to returns in line with the All Property average, at 0.6%;
* All Property rental values were flat in March, with only Central London offices and retail warehouses seeing any gains, growing by 0.5% and 0.1% respectively.

Nick Parker, Senior Analyst at CBRE, said: "It is unsurprising given the extended Easter and bank holiday breaks that investment markets eased in April. This has led to a very flat market with momentum lost from earlier in the year. It is only Central London that appears to buck this wider trend, thanks largely to rapidly rebounding occupier markets, with rents up 2.7% this year."

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