UK yields for some property types seem to have compressed in May 2009, according to a recent report by Savills. According to this report, UK prime equivalent yields have remained stable in May 2009, for most property types, but for some property types they have decreased compared to April.
The biggest drop in prime equivalent yields is reported for high street retail, as Savills reports a prime equivalent yield of 6% for May 2009, which is 50 basis points below the yield of 6.5% that has been reported in the two previous months. The international consultant reports also lower yields for all types of retail warehouses. In particular, in May 2009 yields for open retail warehouses, retail warehouse parks (restricted) and stand alone retail warehouses were 6.75%, 8.25% and 8.0%, respectively, all 25 basis points below their April 2009 levels.
The leisure park investment market seems to have further weakened as Savills reports an increase of 25 points in yields, which increased from 8.5% in April 2009 to 8.75% in May 2009.
Yields for West End offices, City offices and Provincial offices held on their April 2009 levels of 6%, 6.5%, and 7%respectively. Yields for shopping centres held also their April 2009 level of 7%. Finally, yields for industrial distribution properties and industrial multi-let properties remained stable at 7.5% and 8.25%, respectively, according to the Savills report.
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