The CB Hillier Parker All Property Average Yield fell for the third consecutive quarter to stand at 7.2% in Q3 2002. Downward pressure is most evident in the retail sector, with high street shop and retail warehouse yields improving by 20 and 10 basis points respectively, both now standing at 6.8%.
Falling yields in Central London and the South East contributed to a reduction in the average office yield of 10 basis points to 7.4%, while industrial yields remained static at 7.9%.
This latest improvement in property yields is difficult to reconcile with the weak conditions that currently prevail within the occupational markets where rental value growth has stalled since the turn of the year. Sluggish tenant demand reflects the uncertain economic climate and an element of corporate paralysis. Occupiers are unlikely to commit to major new property requirements until the tentative recovery in the global economy becomes more firmly established and equity markets stabilise.
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(source: CB Hillier Parker)
