London and the North West “outperform” rest of UK in commercial rent growth

Commercial property rental values increased by 0.4 per cent in the final three months of 2016, the latest CBRE report has revealed.

The figures represent the slowest quarterly growth in the past year, compared to the total growth of 3.7 per cent in 2016, and five per cent growth in 2015.

CBRE’s Prime Rent and Yield Monitor indicate that the industrial sector saw the biggest increase in rental values in the three months to December 2016, with prime rents growing 1.1 per cent.

London and North West industrial rents “outperformed” all other regions, the report said, growing by 2.8 per cent and 2.7 per cent respectively.

As a whole, the industrial sector recorded the largest increase in prime rent over the year, growing by 6.5 per cent. High streets followed closely at 5.4 per cent growth for the year, despite just 0.3 per cent growth in the final quarter.

The office sector remained stationary, recording no increase in rents.

Likewise, yields for prime offices and retail warehouses were unchanged in the final quarter, while yields across all UK prime commercial property increased by 11 basis points (BPS) over the course of 2016.

Miles Gibson, Head of UK Research at CBRE, said: “Despite 2016 being characterised by uncertainty in the UK’s political and economic landscape, the prime commercial property sector has again shown its resilience with positive, albeit easing, growth in prime rents across all main sectors. The Industrial sector, in particular, has helped steady the ship throughout 2016, outperforming the national average in every quarter.”