UK commercial property rents grew in June, despite uncertainty in build up to Brexit vote
Commercial property rents were up 0.2 per cent in June, in line with the trend for the year to date and in spite of uncertainty surrounding the EU referendum – but capital value grow slowed in the month.
According to the latest CBRE index, capital values grew by 0.1 per cent in June, down from growth of 0.2 per cent in May. But, CBRE said, the total returns of 0.6 per cent for the month matched returns seen almost every month of the year to date.
While the commercial property and real estate services adviser said Brexit uncertainty had not dented rents in the six-month period, it warned that July's numbers would paint a fuller picture of the impact the vote had. CBRE warned last year that a UK exit of the EU would hurt the property sector.
For the first half of 2016, rental value growth was 1.1 per cent – behind the 1.7 per cent growth recorded in the same period of last year. And capital value growth slowed significantly to 0.6 per cent in the first six months of the year, compared with 4.1 per cent growth in the first half of 2015.
“Overall, rents and capital values continued to grow in June, with the industrial sector in particular showing strong growth in a month of significant uncertainty," said Miles Gibson, head of research at CBRE UK.
"Clearly, capital value growth has slowed, but occupier demand has remained high across the country, pushing up all property rental growth as fast as any other month this year.
“These figures reflect CBRE valuations carried out in the days immediately following the referendum vote, but July’s monthly index will give a much clearer indication of how monthly-valued assets have been affected by the uncertain environment for commercial property in the aftermath of the Brexit decision.”