U.K. commercial real estate values rose for the first time in 18 months in May, led by increasing demand for offices, Investment Property Databank Ltd. said.
The average value of stores, offices and warehouses climbed 0.01 percent from April, London-based IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 0.6 percent last month.
“It may seem like insignificant growth, but this is an important milestone for the U.K. property market,” Phil Tily, a managing director at IPD, said in the statement. “After the double-dip recession and a fall in values of over 37 percent, U.K. property has finally, painstakingly, clawed itself back to growth.”
The commercial property market is improving as bank lending increases and overseas buyers look beyond London to purchase real estate. Bank of England Governor Mervyn King said on June 4 that stimulus provided by the central bank meant there were “good reasons to suppose that a gentler recovery is under way.”
Office property values had a 0.2 percent gain in May and retail and warehouse values were little changed, according to IPD.
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