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Office Slump Drags Down Property Performance

LONDON-Although the London stock market has bounced back strongly during 2003, property is still outperforming equities on a year-on-year basis, according to Jones Lang LaSalle. But only just. Property performance is slowing.

By Graham Parker | Updated on August 01, 2003

LONDON-Property produced a total return of 10.2% over the year to June 2003, outstripping returns on equities, long dated gilts and index linked gilts, according to the latest research from Jones Lang LaSalle. But property performance is slowing.

The overall figures mask a wide divergence between individual property sectors, with retails producing annual returns of 16.2%, compared with 10.9% for industrials and just 3.6% for offices.

The retail sector has delivered a higher return over the last quarter–at 4.0%–than the office market has produced over the entire year. Retail has seen yields harden by six basis points and it was the only sector to produce positive rental growth both over the quarter–at 2.3%–and year–at 8.8%.

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