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Yields Continue to Rise

LONDON-Average yields on UK commercial property have moved out for the sixth consecutive quarter to stand at 7.3% according to CB Hillier Parker. Offices and Industrials in London and the South East have been hardest hit by the slump in investor confidence.

By Graham Parker | Updated on September 17, 2001

LONDON-Average yields across the UK commercial property sector have continued their inexorable rise, according to new research from CB Hillier Parker. The average yield rose by a further 10bp to 7.3% during the third quarter of the year. But the rate of increase seems to be slowing, and this quarter’s increase was the smallest since yield began their upward lurch in the second quarter of 2000.

The retail sector has been hardest hit so far, but over the past quarter high street shop yields stabilised at 7%, the first time that shop yields have not risen since May 2000. Pressure on yields is now strongest in the Western Corridor office market and the South Eastern industrial market, where rental values are under greatest downward pressure.

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