Commercial property offers strong rents and capital growth in Q1

CBRE study shows continued strong performance in commercial property sector.

Business mortgage holders continued to see positive performance in the UK commercial property sector in the first quarter of 2014, according to new figures.

CBRE revealed that the office market maintained the trend of the last seven quarters by recording the strongest results in terms of rental value, delivering growth of 2.6 per cent over the quarter and 8.5 per cent for the last year.

Central London saw the biggest expansion in the three months to March, while the rest of the UK saw rents go up by 0.2 per cent, after experiencing falls leading up to the middle of 2013.

In the retail sector, average rental value growth remained slow in the first quarter, while overall capital values for high street shops picked up by 2.8 per cent.

CBRE research analyst Aleksandra Starczynska said the performance of commercial real estate is reflective of the improving economic situation in the UK.

She added: "Yields are now falling across the entire country and rental value growth is becoming more and more widespread."