A quarter-end surge from the industrial sector helped boost the national average. Rental values increased by 0.2% across All UK Property over the month.
Over the first half of 2017, capital value growth reached 2.5%, up some way from the 0.6% growth in same period last year, but still shy of the 4.1% recorded in H1 2015.
Rental value growth was 0.8% for the first half this year, down from the 1.1% in the same period in 2016. Propped up by steady income returns, total returns hit 5.3% for the first half of 2017.
The industrial sector returned to its previous form, with capital values rising 1.5% in June, up from 0.5% in May.
Capital growth was driven by industrials in the South East, which reported a 1.8% increase for the month. Industrials in the rest of the UK posted an increase of 0.9%. Industrial rental values rose 0.5% over the month. In the first half of 2017, capital values in the industrial sector rose 5.8%, while rental values increased 2.6%. Total returns were 8.8% for UK industrial as a whole, and 9.9% for South East industrial.
Miles Gibson, head of research at CBRE UK, said: “June’s results mark the end of H1 2017 and 12 months since the EU referendum. Despite City office rental values falling for a third consecutive month, overall results paint the picture of steady property performance. Industrials in particular continue to perform well and provide a boost to overall performance.”
Elsewhere, retail capital values increased 0.1% overall in June, with high street shop capital value growth of 0.2% for the month. Rental values also increased slightly, with the sector reporting growth of 0.1%. In the first half of 2017, capital values in the retail sector increased 0.9% overall, with high street shops in the South East reporting an increase of 1.3%. Rental values increased by 0.3% over the same period.
The office sector recorded capital value growth of 0.4% over the month of June, boosted by performance outside of Central London. Outer London/M25 Offices reported capital growth of 0.5%, while the rest of UK offices recorded growth of 0.6%. While rental values at the all UK office level were flat in June, this disguised a divergence in performance between Central London, where rental values fell -0.3%, and mark6ets outside the capital, where rental values rose. Capital values in the office sector as a whole increased by 2.3% in H1 2017. Rental values increased 0.4% across the sector in H1.