In January 2010, there was an increase of +0.9% in UK commercial property values, down from the record +3.3% increase recorded in December 2009, as a widely anticipated slowdown in the rate of capital appreciation occurred following three successive months of record growth in the final quarter of 2009, according to CB Richard Ellis (CBRE).

David Wylie, head of economics and forecasting at CBRE, said: “January’s 1.5% total return marks an unsurprising moderation in the commercial property market’s recovery in what is often a quieter month in the property calendar. The breakneck pace of capital appreciation seen in the closing months of 2009 has moderated, but given the breadth and depth of investor demand currently seen in the market, total returns look set to re-accelerate in the coming months.”

The strongest performer was Central London offices with total returns of +2.2%, around half of December’s 4.3% figure. In contrast, retail warehouses showed the most significant slowing in the rate of capital growth, with total returns up by just +1.2%, their weakest monthly increase since June 2009.

All-Property rental values were down only -0.1%, a possible early indication that demand in occupier markets may be becoming more positive, whilst yields were broadly flat, remaining unchanged at 7.3% the report stated.