Commercial RE returns 9.3% in year to June

Commercial real estate returns increased by nearly 4% in the year to June 2018 and reached 9.3%, according to the MSCI/IPD UK Quarterly Property Index. Capital values increased by 4.5% over the year, while income returns were 4.7%. Sector performance varied hugely, with industrials delivering far higher capital value growth and total returns than any other sector – to the extent that industrial assets are now the lowest-yielding assets at the headline level. However, according to the IPF UK Consensus Forecasts Spring 2018, this growth is soon to cease.