U.K. commercial property capital value declines persist in September 2023

Capital values for commercial real estate declined by 0.4 percent in September 2023, according to the latest CBRE UK Monthly Index. Rental values rose by 0.4 percent, while total returns were 0.0 percent throughout the month.

Although capital values remained unchanged throughout second quarter 2023, they fell by 1.1 percent throughout third quarter 2023. This was despite rental values increasing by 0.9 percent. Total returns for third quarter were 0.3 percent.

Retail capital values fell by 1.2 percent in September, while rental values increased by 0.1 percent. Retail warehouses posted the largest fall in capital values, declining by 1.5 percent. Standard shops saw capital values fall by 0.7 percent, predominantly due to the values of shops in the rest of the United Kingdom declining by 1.0 percent. Shopping center capital values fell by 0.5 percent. Both retail warehouse and standard shops saw rental values increase during September (0.2 and 0.1 percent respectively),