The UK retail sector experienced the biggest drop in capital values over January compared with other asset classes, according to the latest CBRE Monthly Index.
Capital values (-0.7%), rental values (-0.2%) and total returns for the retail sector were all negative for the fifth consecutive month, CBRE said. Shopping centres recorded a fall of -0.6% in capital value over January while total returns were -0.1%. Retail warehouses experienced positive rental value growth for the first time since July 2018 (0.1%) but still recorded a -0.8% fall in capital values in January 2019.
Overall, UK commercial property got off to a subdued start in January. The office sector was stable, recording capital value growth of 0.1% and total returns of 0.5%. Rental values remained flat.
While remaining the star performer of the asset classes, the industrial sector experienced its lowest monthly growth in capital values (0.3%) in January since October 2016. In the South East there was capital value growth of 0.4% and total returns of 0.7%. Rental values increased 0.2% over the month.
Robin Honeyman, senior research analyst at CBRE UK, said: ‘A typically slow start to the year, January’s results were a subdued continuation of the trends seen throughout 2018. Crunch time for Brexit, ongoing turbulence in the Retail sector and continued demand for Industrial space will all contribute to an eventful year ahead.’