CB Richard Ellis Monthly Index

The latest CB Richard Ellis (CBRE) Monthly Index reveals that the commercial property downturn eased further in May, with -1.5% off values, compared with -2.1% the previous month. Rental values fell by -1.1% somewhat less than April’s -1.3%.

David Wylie, Head of Economics and Forecasting at CBRE commented: “May marks a second consecutive month of improvement in the results, with relative stabilization in investment yields. This does not necessarily mark a turning point in the market yet, but suggests investor sentiment is becoming more favourable.”

“The investment market nonetheless continues to be muted in 2009, with little over £5.2bn worth of property exchanged in the year to date. What has been seen is a general improvement for a relatively narrow range of prime assets, with yields starting to firm up over the last couple of months. This is also evident at the wider All Property level, where the equivalent yield moved out just 4bp in May, ending the month at 8.42%. This trend is even more evident in the Central London office markets where yields have stabilised.”

The CB Richard Ellis Monthly Index showed:

• All property capital values fell by 1.5% in May, -12.4% year to date for 2009.
• Property values are now 43.6% below their peak in mid-2007
• Total returns fell by 0.8% in May, 36.2% lower than their peak mid-2007.
• All Property rental values fell by 1.1% in May, a slowing on April’s fall of -1.3%.
• All Property equivalent yields only moved 4bp, ending the month at 8.42%.

source : CB Richard Ellis