U.K. Commercial Property Falls for Ninth Straight Month
U.K. commercial real estate values fell for the ninth straight month in July as Britain’s economy faltered, Investment Property Databank Ltd. said.
The average value of stores, offices and warehouses declined 0.4 percent from June, led by warehouse properties, London-based IPD said in a statement yesterday. Total return, which combines changes in real-estate values and rental income, was 0.2 percent in July, compared with 0.1 percent in June.
“The difficulty for asset managers and investors remains in finding secure tenants for these discounted properties,” Phil Tily, a managing director at IPD, said in the statement.
The U.K.’s double-dip recession is squeezing household incomes, which rose 1.6 percent in the second quarter from a year earlier. That’s affecting demand for goods and services and limiting landlords’ ability to demand higher rents. Rental values in the U.K. fell 0.1 percent for the second consecutive month in July in a show of “lackluster demand,” Tilly said.
The value of office buildings in the City of London financial district fell for the second straight month in July, “indicating values in the sector may be past their peak,” IPD said in the statement. The West End of London is now the only area of the U.K. recording consistent growth, IPD said.
The IPD index was compiled from appraisals of 3,585 properties valued at 33 billion pounds ($52 billion) at the end of July.
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