Property Market Values July 1995

Capital Values

The All Property Capital Value Index fell by 0.9% over the quarter to May. The other asset classes, equities and gilts, saw increases of 6% and 1.5%, respectively.

Despite a marginal rise in rental values in the retail sector, capital values have fallen during the quarter and this can be attributed to rising yields. Apart from Central London, all regions experienced a decline in their capital values. As with the average yields, the gap between the All Shops Capital Value Index and the All Offices Capital Value Index has narrowed to a level last seen in early 1992.

For the third successive quarter, the All Office Capital Value Index has increased, although at a slower rate than the previous quarter to February. This slow- down in growth is clearly illustrated when comparing year- on-year changes. The year to February saw a 23.8% increase in office capital values whereas the year to May saw only a 6.7% increase.