U.K. Commercial Property Values Fall for 17th MonthNeil Callanan
U.K. commercial real estate values fell for the 17th straight month in March, led by a drop in retail properties, Investment Property Databank Ltd. said.
The average value of stores, offices and warehouses, declined 0.2 percent from February, London-based IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 0.4 percent in March.
“We are still seeing subdued returns adversely affected by negative capital movements outside of London” as prices continue to fall there, Phil Tily, a managing director at IPD, said in the statement. “Though the U.K. economy has managed to avoid a triple-dip recession, it is nevertheless going to be a long road to recovery for the commercial property sector.”
Britain’s economy will grow less than previously forecast this year and further bond purchases by the Bank of England may do little to stimulate the recovery, the London-based Ernst & Young Item Club said today. That’s prompting businesses to delay decisions on moving to new offices and warehouses and causing consumers to spend less, hurting stores.
Retail values overall declined by 0.3 percent in March, compared with 0.1 percent for offices and warehouses.
The IPD index was compiled from appraisals of 3,416 properties valued at 31.4 billion pounds ($48.3 billion) at the end of March.