UK commercial property prime rental values continue to increase.

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1 MARKETVIEW UK Prime Rent and Yield, UK commercial property prime rental values continue to increase *Arrows indicate change from previous quarter. Prime rental values increased by 1.3% in, resulting in rental value growth of 2.6% H1 21. The average prime yield was down by an average of -6 basis points and currently stands at.4%, a fall of -32 basis points over the year to date. Capital value growth was 2.6% for the quarter and 6.% in the first half of the year. Across the main sectors, Industrials recorded the highest growth in terms of rental and capital values. Prime rents for the industrial sector increased in 32% of locations monitored, with the highest growth in London. Prime yields declined in most regions. Whilst rental value growth was more evident for offices in Central London, South East and Eastern, yield shift was more even across the UK. The retail sector shows a divergence between London and the Rest of UK. Rental values increased in Central London, but remained unchanged or fell in the rest of the country. Figure 1: Rental Values: Risers and Fallers Source: CBRE, Q Q3 212 Q1 213 Q3 213 Q1 214 Q3 214 Q1 21 Risers Fallers CBRE Research 21 CBRE Ltd. 1

2 MARKETVIEW Figure 3: Nominal Prime Rental Growth (%) Q/Q Y/Y Shops Shopping Centres.2.6 Retail Warehouses Offices Industrials All Property Figure 4: Prime Yields (%) Q4 214 Q1 21 Q/Q bps Y/Y bps Shops Shopping Centres Retail Warehouses Offices Industrials All Property Figure : Capital Value Growth (%) Q/Q Y/Y Shops Shopping Centres Retail Warehouses Offices Industrials All Property Source: CBRE, CBRE Research 21 CBRE Ltd. 2

3 Q2 29 Q2 29 Q2 29 MARKETVIEW PRIME RENTS OFFICES Figure 6: Annual Prime Rental Growth by Sector (%pa) Shops Retail Warehouses Offices Industrial Shopping Centres Figure 7: Central London Prime Office Submarket Rental Growth (%pa) RETAIL West End City Midtown Docklands Figure 8: Regional Prime High Street Rental Growth (%pa) INDUSTRIALS Central London Eastern South East Rest of UK (escl. SE and Eastern) CBRE Research 21 CBRE Ltd. 3

4 Q2 29 Q2 29 Q2 29 MARKETVIEW PRIME YIELDS OFFICES Figure 9: UK All Sector Average Prime Yields (%) Shops Shopping Centres Retail Warehouses Offices Industrial RETAIL Figure : Prime Office Market Yields (%) West End City South East West Midlands INDUSTRIALS Figure 11: Industrial Market Yields (%) London South East West Midlands CBRE Research 21 CBRE Ltd. 4

5 Q2 29 Q2 29 Q2 29 MARKETVIEW PRIME CAPITAL VALUES OFFICES Figure 12: Annual prime Capital Value Growth by Sector (%pa) Shops Retail Warehouses Offices Industrial Shopping Centres Figure 13: Prime Office Submarket Capital Value Growth (%pa) RETAIL Central London Rest of UK (excl. SE and Eastern) Key Provincial City Figure 14: Regional Prime High Street Capital Value Growth (%pa) INDUSTRIALS Central London South East Rest of UK (excl. SE & E) CBRE Research 21 CBRE Ltd.

6 MARKETVIEW Rental Growth (%) Actual Yields (%) Yield Shift (bps) Capital Value Growth (%) Q/Q Y/Y Last Years (% pa) Q/Q Y/Y Q/Q Y/Y All Property All Shops Central London Suburban London South East Eastern South West East Midlands West Midlands Wales North West Yorkshire & Humberside North East Scotland Rest of UK (excl. London, SE and Eastern) All Shopping Centres In Town Out of Town London, SE and Eastern Rest of UK (excl. London, SE and Eastern) All Retail Warehouses Bulky Fashion Open A London, SE and Eastern Rest of UK (excl. London SE and Eastern) All Offices West End City Mid Town Docklands Southbank M2 North M2 South Thames Valley Key Provincial Cities Out of Town Central London Suburban London South East Eastern South West East Midlands West Midlands Wales North West Yorkshire & Humberside North East Scotland Rest of UK (excl. London SE and Eastern) All Industrial London South East Eastern South West East Midlands West Midlands Wales North West Yorkshire & Humberside North East Scotland Rest of UK (excl. London, SE and Eastern) CBRE Research 21 CBRE Ltd. 6

7 MARKETVIEW UK PRIME RENT YIELD CONTACTS CBRE OFFICES Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.