According to the Investment Property Databank (IPD), UK commercial property values rose +0.2% in August which is the first positive growth seen in 26 months, but rents and occupancy continued to decline.

Industrial properties posted the largest monthly change in values, rebounding from a -0.24% fall in July to a +0.26% rise in August, while retail properties showed the strongest capital growth at +0.37%. The value of offices continued to fall slightly in August, however, down by -0.03%.

Rents for offices, retail and industrial fell by -0.48% on average although this was a slight improvement of +1% on July’s figure.

Vacancy rate also rose in August to a new record high of 12.3% after falling in July. This was led by a spike in vacancies in the industrial sector of +1.2% to 18.2%.

Initial yields for all property sectors decreased to 7.86% on average, following a compression in yields for both the retail and industrial sectors to 7.53% and 8.18% respectively.

Ian Cullen, co-founding director at IPD, said: “The much-anticipated return to capital growth in UK commercial property comes at a time when the finance sector is marking a very painful anniversary - the collapse of Lehman’s.

“Since that profound shock, commercial property has delivered record losses, but has at least traced a relatively stable path towards this first tiny sign of recovery - in stark contrast with the much more violent oscillations of the equity and bond markets.”