Property: how much strength is left in London and the South East? - Citywire

Property: how much strength is left in London and the South East? - Citywire

The flight to quality that has characterised the performance of virtually all asset classes for much of this year also persists unabated in the UK commercial property market, with returns from central London offices continuing to massively outperform the broader sector.
But how long can this divergence in returns continue?
Despite the gloomy macro picture, central London offices saw their capital values rise by 0.2% in August, according to the CBRE UK Monthly index. Although down from the 0.4% figure seen in July, this compares with a -0.3% decline for the all property index, -0.8% in outer London/M25 offices and -0.7% in the rest of the UK offices.
IPD reported a similar disparity, with rental growth coming in at 0.4% for offices in the capital, whereas outside of London they have declined for three straight months.