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Commercial Property News
IPD report commercial property rentals falling for first time as well as capital values
Figures from IPD and Acadametrics published on Friday suggested that property stocks may not be out of the woods yet, despite the rebound in home builders on Friday.
IPD says its UK property index saw a total return of -0.7% in May.
However, this masks the fact that on a 12-month basis, the index' all property total return fell to -13% from -11.7% in April "as the relatively strong months of the first half of last year are successively dropped from the calculation."
Offices saw the sharpest fall in total returns month-on-month, down -0.9%.
Malcolm Frodsham, research director at IPD, said: “After eleven months of falling capital values, May 2008 also registered a very small fall in rental values; the first month that both the yield and rent drivers of capital value growth have been pushing in the same downward direction”.
The downturn in commercial values comes after a turbulent week for housebuilders after the City first ditched the stocks then returned with gusto by Friday on news that analysts at UBS saw 'value' in the stocks.
Taylor Wimpey closed up almost 16% or 9.75p at 70.5p on Friday, Redrow climbed simlarly, adding 22.25p to 163.75p and Barratt Developments added 10p to 86.5p. Of course, all three stocks have fallen sharply over the past year, by up to 92% in the case of Barratt.
Persimmon, the largest FTSE 350 home construction stock by market cap gained 38.5p to 411.5p. It is down some 70% in the past 12 months, down 50% over three years.
IPD says its UK property index saw a total return of -0.7% in May.
However, this masks the fact that on a 12-month basis, the index' all property total return fell to -13% from -11.7% in April "as the relatively strong months of the first half of last year are successively dropped from the calculation."
Offices saw the sharpest fall in total returns month-on-month, down -0.9%.
Malcolm Frodsham, research director at IPD, said: “After eleven months of falling capital values, May 2008 also registered a very small fall in rental values; the first month that both the yield and rent drivers of capital value growth have been pushing in the same downward direction”.
The downturn in commercial values comes after a turbulent week for housebuilders after the City first ditched the stocks then returned with gusto by Friday on news that analysts at UBS saw 'value' in the stocks.
Taylor Wimpey closed up almost 16% or 9.75p at 70.5p on Friday, Redrow climbed simlarly, adding 22.25p to 163.75p and Barratt Developments added 10p to 86.5p. Of course, all three stocks have fallen sharply over the past year, by up to 92% in the case of Barratt.
Persimmon, the largest FTSE 350 home construction stock by market cap gained 38.5p to 411.5p. It is down some 70% in the past 12 months, down 50% over three years.
Mon, 16th Jun 2008