UK commercial property values flat in October-IPD

LONDON (Nov 15): Growth in UK commercial property values was flat in October at 0.0%, from 0.1% in September, with continuing uncertainty in the eurozone crisis weighing on investor sentiment, Investment Property Databank (IPD) said.

IPD said 27 months of non-negative capital growth had seen UK commercial real estate values rise by 17.8%. They fell about 45% during the global financial meltdown.

Total returns — comprising both income and capital growth — for October was 0.6%, unchanged from September, IPD said in a statement.

"Central London retail and office values have been driving returns since the recovery began," IPD's UK and Ireland managing director Phil Tily said.

"However, in the last few months there have been increasing concerns over a pricing bubble in the capital, which the European economy could further exacerbate," Tily said.

Retail and industrial properties both saw 0.0% price growth in October, while offices were up 0.1%. Retail and office income returns were each 0.5%, with industrial property income up 0.6%, IPD said.

"Capital growth in the UK finally drew to a close as the continuing crisis in the euro zone, and the very real doubts about its resolution, took their toll on occupier demand and investor sentiment," IPD said. — Reuters