Commercial property market continuing to show stability

JLL Property Index finds market generated overall returns of 2.4% in last quarter

Hannah Dwyer of JLL: Overall capital values have increased by 82.6% since the bottom of the market, though still 40% lower than the peak.

Hannah Dwyer of JLL: Overall capital values have increased by 82.6% since the bottom of the market, though still 40% lower than the peak.

 

The commercial property market continues to show stability, with the latest JLL Property Index reporting overall returns of 2.4 per cent in the last quarter and 11.1 per cent in the full 12-month period.

Capital values increased by 1.2 per cent in the quarter and 5.5 per cent in the year.

This was driven by a 2.1 per cent growth in the office sector and by a 0.7 per cent rise in the industrial returns in the past three months.

There was no discernible change in the retail sector.

Significantly, according to Hannah Dwyer, head of research at JLL, overall capital values have increased by 82.6 per cent since the bottom of the market but still remain 40 per cent lower than at the peak in Q3 2007.

The JLL report also shows that overall income dropped by 5.1 per cent in the last three months after a large office building in the JLL portfolio became vacant when the tenant relocated.

In the past 12 months, income across the portfolio decreased by 3.5 per cent.

Overall rental values across the entire portfolio increased by 1.8 per cent in the last three months and by 7.8 per cent over the past year.

Offices showed the greatest increase in the last quarter (3.1 per cent), followed by industrial at 0.6 per cent. The estimated rental value for retail fell by 0.1 per cent, although it was still 5.2 per cent higher than in June 2016.