Commercial property prices in the U.K. rose at a slower pace in April after public spending cuts deterred companies from renting additional space, Investment Property Databank Ltd. said.
The average values of offices, stores and warehouses increased 2.7 percent from a year earlier, the London-based research company said today on its website. That compares with a 3.5 percent gain in March.
Real-estate values are 35 percent below their peak in June 2007, IPD said. The total return, including price gains and rental income, was 0.7 percent in April compared with 0.9 percent the previous month.
“It looks like the wider macro-economic factors affecting the economy, notably the government spending cuts, are beginning to take their toll on occupier demand,” Phil Tily, the managing director of U.K. and Ireland at IPD, said in an e-mail.
The monthly index was compiled from 3,646 properties valued at 33.8 billion pounds ($55 billion) at the end of April, IPD said.
To contact the editor responsible for this story: Andrew Blackman at firstname.lastname@example.org.