Returns for central London offices strong in February

05/03/2010 16:34:54

The recovery of the West End commercial property market and others across the UK resulted in asset values increasing by 1.4 per cent in February, overtaking the shallow curve seen in January, new figures show.

Despite a fall in rents due to weak occupier demand, the latest CB Richard Ellis Monthly Index for commercial property shows there were total returns of two per cent for all property.

With total returns of 2.6 per cent and capital growth of 2.1 per cent, central London offices posted the best performance during the month, beating shopping centres.

Central London offices also recorded flat rental growth in February, which the organisation said was an indication that the capital is enjoying relatively strong occupier demand.

In a recent briefing note to investors, Investment Week warned that short-term commercial property markets could experience a decline in capital values in the coming months.

However, the firm added that commercial property returns of between eight and nine per cent per annum can be expected for the medium-term.

Posted by Emma Davies

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