UK property value growth slows in July-IPD - Finance News - London South East

UK property value growth slows in July-IPD - Finance News - London South East

LONDON, Aug 12 (Reuters) - UK commercial property values rose 0.1 percent in July, from 0.2 percent in June, with the market's slowing rebound from the global financial crisis and a fall in retail values pushing the growth rate to its lowest since the recovery began.

Investment Property Databank (IPD) said on Friday property values had gained 17.6 percent in the past two years, having tumbled about 45 percent during the financial crisis.

'With a 0.1 percent improvement in capital values this month, the balance between the performance of prime assets and the more challenged secondary markets remains finely poised,' IPD managing director for UK and Ireland Phil Tilly said.

Returns across all commercial property sectors -- office, retail and industrial -- totalled 0.6 percent in July, down from 0.7 percent in June, almost entirely driven by rental income.

Total income returns for July was 0.5 percent, comprising 0.5 percent from offices, 0.6 percent from industrials and 0.5 percent in retail, IPD said. Total income returns in June was 0.6 percent, IPD said.

Increasing UK consumer frugality was dampening occupational demand for retail space, causing retail capital values to fall, even as the office market continued to register growth.

'Challenges within the wider economy have put further pressure on the market,' Tilly said.

'Consumer spending falls are impacting on occupier demand and while retail yields remained steady, a -0.2 percent drop in rental values has prompted a -0.1 percent decline in retail valuations for July,' he said.

A Confederation of British Industry survey showed retail sales fell at the fastest rate for a year in July as consumers reined in their spending, while a number of British retailers fell into administration.