Insignia Richard Ellis Monthly Index August 2002

Firmer investment yields had a strong positive impact on the All Property capital values in August producing monthly capital growth of 0.6% on the Insignia Richard Ellis Monthly Index.

The strengthening in All Property total returns apparent since August of last year has continued. Annual total returns have now moved up to 8.5% in August from 7.7% the previous month.

The increase in returns was driven by annual capital growth moving further into positive territory in August after returning to growth in July. All Retail maintained its position as the strongest performing sector in the latest Insignia Richard Ellis Monthly Index.

Retail rental growth continued to hold up well improving to 3.1% in August up from 2.6% the previous month. Capital growth continued to improve; annualised growth in capital values in the three months to August were particularly strong rising to 10.9%, from 8.4% in the three months to July.

Retail Warehouses continued to be a strong driving force behind retail returns as increased rental and capital growth led to returns edged up to 12.9% in August from 11.4% in July.

Offices remained the weakest performing sector, steady capital values in August meant that total returns edging up slightly in August. There were however contrasting fortunes for the office sub-sectors. Returns for M25 offices continued to improve as a slowing in the rate of decline in capital values led to total returns moving up to 3.8% in August from 3.1% in July.

Returns on Central London offices continued their decline, as the annual decline in rental values increased to - 12.4%, annual returns fell to 0.7% down from 1.2% the previous month.

Industrials continued their steady performance as constant rental growth and a slight increase in capital growth led to an increase in annual total returns to 10.0%, from 9.6% the previous month.

(source: Insignia Richard Ellis)

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