U.K. CRE Price-Growth Dips - Analyst Blog

According to a report published by CB Richard Ellis Group Inc. (CBG), the largest multinational commercial real estate firm (on the basis of 2009 revenue), growth in commercial real estate (CRE) prices in the U.K. dipped for the fifth consecutive month in August as investors remained wary of buying even discounted properties.

The latest monthly index from CB Richard Ellis revealed that the average CRE property value increased 0.3% in August compared with a 0.4% increase in July, taking the year-to-date rise in property values to 7.5%. The report also unearthed that All Property total return, which comprised both capital value and rental value growth, dipped to 0.8% in August from 0.9% in July.

Sector-wise, industrial property market was the weakest sub-sector with total year-to-date returns of 8.7%, compared with 12.1% for retail real estate and 14.3% for offices. However, despite a fall in property values and total return, central London offices were the strongest performing sector in August with total returns of 1%, down 0.2% from July. Average commercial property values were up 18.6% from their nadir recorded in mid-2009.

CB Richard Ellis is the global market leader in commercial real estate brokerage and advisory services for property leasing and sales, forecasting, valuations, origination and servicing of commercial mortgage loans, as well as project and real estate investment management. The company has a broad range of real estate products and services, and an extensive knowledge of domestic and international real estate markets that enables it to operate as a single-source provider of real estate solutions.

CB Richard Ellis offers a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate assets globally under the CB Richard Ellis brand and provides development services under the Trammell Crow brand.

The rating on CB Richard Ellis is currently “Neutral” with a Zacks #2 Rank, which translates to a short-term ‘Buy’ recommendation and indicates that the stock is expected to perform well above the overall U.S. equity market for the next 3 months.