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U.K. Commercial Property Values Rise for Sixth Straight Month

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Nov. 14 (Bloomberg) -- U.K. commercial real estate values rose for the sixth straight month in October as the economic recovery gained pace, Investment Property Databank Ltd. said.

The average value of stores, offices and industrial properties climbed 0.6 percent from a month earlier, London-based IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 1.1 percent.

The U.K.’s jobless rate declined to 7.6 percent in the third quarter, the lowest since 2009. British services growth rose at the fastest pace in 16 years in October and manufacturing and construction also expanded last month, Markit Economics said Nov. 5.

“Returns are continuing to rise around the U.K. as economic growth flows out of London,” Phil Tily, an IPD managing director, said in the statement. “Office returns in the South East outpaced those of central London, while industrial units around the country are seeing stable growth as investor sentiment improves.”

Office buildings had a 0.9 percent gain in October and warehouse values climbed 0.8 percent, according to IPD. The average value of retail properties rose by 0.3 percent.

Income-producing commercial properties lost value for 17 straight months through March and were unchanged in April.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net