U.K. commercial real estate prices failed to rise for the first time in more than two years in October as Europe’s sovereign-debt crisis sapped investors’ confidence, Investment Property Databank Ltd. said.
There was no change in values in October compared with the previous month, the first time that’s happened since August 2009, IPD said in a statement today. The annual growth rate remained at 1.7 percent.
“The continuing crisis in the euro zone, and the very real doubts about its resolution, took their toll on occupier demand and investor sentiment,” the research company said.
Retail and office values in London, which led the market’s recovery, may not have much further to rise, according to Phil Tily, IPD’s managing director for the U.K. and Ireland. Prices for office properties in central London rose 0.4 percent in October from the prior month, while there was no growth in other parts of the city.
“In the last few months, there have been increasing concerns over a pricing bubble in the capital, which the European economy could further exacerbate,” Tily said in the statement.
Office properties, retail buildings and warehouses appreciated by an average of 1.3 percent in the first 10 months, IPD estimates. The London-based company said the annual growth rate will probably be 1.4 percent at the end of the year.