Commercial property rental value growth is keeping pace with the rate seen in 2014 and 2015, according to the latest CBRE Monthly Index. Rental values grew 0.8% in the first four months of the year, equalling the year-to-date growth for the same time period in 2015 and surpassing 2014’s total of 0.6%.
While occupier demand shows little sign of slowing, capital value growth has been considerably lower so far in 2016 than previous years, currently at 0.2% compared to 2.2% for the same point last year.
Following a dip in capital value returns for March, when new stamp duty tax bands introduced by the Chancellor increased acquisition costs for properties valued at over £1.05 million, April’s figures showed a return to the levels seen in February, rising from -0.4% to 0.2%, which mirrored February’s 0.2%.
Miles Gibson, Head of UK Research at CBRE UK, said: “Rental value growth seems not to have been affected by political speculation around the Mayoral and local elections and June’s EU referendum.
“After the Chancellor’s tax grab around stamp duty, which inevitably had an impact on capital values in March, returns have reverted to trend for the year to date. The economic fundamentals remain sound and should the UK vote to remain part of the EU, we expect a positive outlook for the second half of the year.”