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ARTICLE · 12 SEPTEMBER 1996

Commercial Property Average Yields

United KingdomReal Estate and Construction
STILL NO EVIDENCE OF FALLING YIELDS

Whilst the All Property Average Yield was unchanged over the quarter, a fall in the benchmark gilt yield caused the reverse yield gap to close, implying a fall in property's relative pricing. On this measure, the latest figures might come as a disappointment to those who had thought that February signalled a low point and that property was starting to make a recovery.

The Retail sector yield was unchanged this quarter after two consecutive increases. This might suggest that this sector is now stabilising. This pattern is repeated in 10 of the 15 regions. Central London (with the lowest yield) is unchanged from 1995's second quarter figure, reflecting its significant rental value growth and higher investor confidence. Yield increases have been broadly based; 75% of all locations rose over the last 12 months.

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