Tomorrow’s anniversary of the collapse of investment bank Lehman Brothers is marked by the first monthly UK commercial property capital growth in 26 months.

According to the latest Investment Property Databank Monthly Index capital values rose 0.2% in August, thanks to further easing in negative rental value growth, which improved by 10 basis points to -0.48%, together with a second-consecutive positive yield impact of 0.64%. The consecutive 25-month peak-to-trough capital decline ended at -44.2%.

All-property initial yields have contracted to 7.86%, following falls in both retail and industrial yields to 7.53% and 8.18% respectively.

Ian Cullen, co-founding director of IPD, said: 'The much-anticipated return to capital growth in UK commercial property comes at a time when the finance sector is marking a very painful anniversary – the collapse of Lehman’s which sent property and most other investment markets around the world into a tailspin.'

'Since that profound shock, commercial property has delivered record losses, but has at least traced a relatively stable path towards this first tiny sign of recovery – in stark contrast with the much more violent oscillations of the equity and bond markets.'

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