Commercial Rental Values Remain Strong in May

By Simon Morris On Thursday, June 26 th, 2014 · no Comments · In , ,

Commercial rental values remained strong in May, performing particularly well in London; a trend Simon Morris believes is set to continue going forward.

Simon Morris Witnesses the Rise and Rise of UK Commercial Property

As a London-based independent property specialist who acts in an advisory capacity to UK property investment funds, Simon Morris has witnessed the rise and rise of UK commercial property as the national economy recovers from the recession.

That rise continued this month, as commercial property values rose 1.1% in May, according to the IPD UK monthly property index; the definitive measure of UK property values month-on-month.  Eclipsing the 0.8% measured by commercial property values one month prior, it was the largest rise values have achieved in 2014 so far.

The IPD Monthly Property Index

The IPD monthly property index further showed that as far as commercial property rental values are concerned, the robustness of the prime Central London market remained intact. Specifically, rental values rose by 1.3% in the lucrative Central London office sector.

This rental value rise contrasts with a general 0.7% rise throughout the rest of London, with retail rent values in the capital also rising 0.7%, and retail rents in the nearby South East market rising by 0.1%. IPD further found that the UK office market collectively experienced a 0.7% rental value rise in May. IPD also measured some rental value growth for shops in the rest of the UK and retail parks.

The Market Has Room to Grow in the Coming Months

These figures show the rising strength of the UK commercial rental market, particularly in the prominent prime Central London office sector. This specifically illustrates the positive effect the economic recovery is having on commercial rental values, as businesses expand and require more office space, reflected particularly by office rental value rises.

In Simon Morris’ opinion, these latest figures show that as a whole, commercial rental revenue, especially revenue generated by the office market, is continuing to prove a lucrative investment opportunity for UK property funds. Furthermore continual rising rental values indicate the market has room to grow in the coming months.

 

 

 

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