Central London offices continued to outperform the other UK market sub-sectors in October, although City office total returns slowed to 0.6% from 1.0% in September. Performance in London’s West End and Midtown were stronger than the previous month at 0.8% and 0.9% respectively.
Reflecting the weakness in other property sub-sectors, values fell for shopping centres, Outer London / M25 offices and industrials.
David Wylie, Head of UK Economics & Forecasting at CBRE, said: "The growth in property values over the past month continues to be relatively skewed towards Central London offices, with strength there more than offsetting weakness elsewhere.
"With the UK market as a whole seeing virtually no movement in yields over the past six months, rental growth has provided the key difference. In the year-to-date Central London offices have seen values rise by 6.3%, which has been almost wholly supported by rental growth.
"By contrast, the slide in high street shop and shopping centre rental values has been a significant factor in holding back overall retail sector capital growth and returns."
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