Property returns improve, IPD UK Monthly Index shows

IPD, the world-leader in commercial real estate performance analysis services, today released the results for its UK Monthly Index for February 2008. The Monthly Index saw a total return of -1.0% m/m in February 2008, a marked improvement on the -1.6% m/m return seen in January and the -3.7% seen in December. Capital values fell by 1.5% in February after a 2.0% fall in January and a 4.2% fall in December.

Performance was remarkably similar across the three main sectors. Continuing the trend seen since July 2007, income return edged up in every sector bar Industrials, where it remained at 0.5%. Industrials continue to deliver a slightly higher income return than Retails and Offices. Turning to capital value growth, we saw smaller falls in February than January across the board, with All Property capital value growth coming in at -1.5% m/m, relative to -2.0% in January and -4.2% in December 2007.

Angela Sheahan, IPD’s Research Manager said: “The re-pricing of property eased in February, but this should not make us complacent: UK commercial property remains in its most rapid and severe correction since the early 1990s recession.”

source : IPD