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News Release

London

Commercial property returning 4.3% over the quarter bringing total return over the past year to its highest level since late 2010

JLL has published its latest UK Property Index which shows commercial property returning 4.3% over the quarter


​LONDON, 23rd October 2014 - JLL has published its latest UK Property Index which shows commercial property returning 4.3% over the quarter, bringing the total return over the past year to its highest level since late 2010 at 19.1%. Rental values continued to rise, showing growth of 0.4% over the quarter, while yield compression helped to drive up capital values by 2.7%.

Secondary properties continued their recovery as they outperformed prime properties for the third consecutive quarter. While capital value growth was still higher in prime properties, higher income yields helped push total returns for secondary properties to 4.8%, compared with just 4.2% for prime.

Other key highlights:
· London continued to outperform the rest of the UK, returning 4.9% and 3.9% respectively, although the gap between the two continued to narrow
· All sectors showed positive returns with offices the highest at 5.2% compared with 5.1% for industrial and 3.4% for retail
· Compared to other asset classes, property was outperformed by gilts (5.4%) but still continued to produce higher returns than equities (-1.0%)

Andrew Burrell, Head of Forecasting at JLL, said: “The UK seems resilient to current global jitters and there is further evidence that investors are moving along the risk curve from the yield compression in secondary assets. If this performance continues in Q4, returns in 2014 will hit a post-crash high of close to 20%.”