UK commercial property values drop in 2022, wiping out 2021 gains: data

UK commercial property capital values decreased by 13.3 per cent as a whole in 2022, and annual total returns were down 9.1 per cent, according to the CBRE Monthly Index published on Monday (Jan 9).

CBRE’s index shows a sharp turnaround from 2021 when commercial property values rose 13.8 per cent and returns rose 19.9 per cent.

Property valuations in Britain’s US$1.6 trillion commercial real estate sector have come under pressure in recent months from rising interest rates and economic uncertainty.

The industrial sector was particularly hard-hit, with capital values down 21 per cent in 2022 and annual total returns of -18.1 per cent, CBRE’s data showed.

Retail property capital values fell by 8.1 per cent in 2022, while the office sector was down by 12.1 per cent. Both also saw negative returns, of -2.1 per cent and -8.3 per cent respectively, CBRE said.

Following a surge in demand for redemptions, UK property funds managing around US$18 billion worth of assets have introduced limits on investor withdrawals. REUTERS