Capital values for UK commercial real estate rose by 0.2% in June while rental values rose by 0.1% and total returns were 0.6%, according to the latest CBRE UK Monthly Index.
The commercial real estate giant said in a statement that the results for June continue the theme of steady increases in capital and rental values seen throughout H1 2025. Capital and rental values have increased by 1.4% and 1.6% respectively during H1, while total returns have been 4.2%.
The Retail sector recorded the highest total returns for June at 0.8%, while retail rental values increased by 0.2%. CBRE said retail total returns continue to be driven by income return, but capital values still rose by 0.2% month-on-month. ‘Standard Shops’ and ‘Shopping Centre’ capital values increased by 0.3% in June, while ‘Retail Warehouse’ capital values rose by 0.2%.
Office total returns were 0.6% in June and office capital values rose by 0.1% overall. While Central London capital values increased by 0.9% and Outer London/M25 Office by 0.1%, Rest of UK Office values fell by 0.5% in June.
Industrial sector total returns were 0.6% for June. Industrial capital values rose by 0.2% across both the South East and Rest of UK segments. Industrial activity in ‘Rest of UK’ regions drove the sector increase by 0.3% in June.
Steven Devaney, senior director of UK research at CBRE, said the H1 results show a “gradual but resilient” recovery for commercial real estate in the UK.
He added: “All sectors are now seeing increases in capital and rental values, while yields have remained stable in H1.
This should provide more confidence for investors seeking to deploy capital through the remainder of the year. Lenders are also looking to deploy further funds in real estate, as shown by our recent lender intentions survey. More than three quarters of European lenders expect to increase origination activity in 2025, which will support further activity and market recovery as 2025 progresses.”
