UK commercial property returns turned positive after eight quarters of negative performance, according to the just released IPD index for the third quarter of 2009.
In particular, the All Property Index (which incorporates office, retail, industrial and other) posted a total quarterly return of 3.4%, representing the sum of an income return of 1.9% and capital growth of 1.5%.
This represents significant improvement over the previous quarter when UK commercial property posted a negative performance of -2.2%, representing the sum of an income return of 1.8% and a capital value decline of -4%.
Clearly the improvement in UK commercial property returns in the third quarter of 2009 was due exclusively to the increase in commercial property values, representing an improvement of 5.5 percentage points in the capital growth component of the All Property IPD Index.
Retail was the best performing property type in Q3 2009 with a 4% total return and a 2.1% capital growth, followed by industrial with a 3.5% total return and a 1.5% capital growth. Office was the worst performing property type with a 2.6% total return and a 0.7% capital growth.
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Return from UK Commercial Property Returns Q3 2009 to Market Watch
