CBRE’s latest monthly survey shows that the All Property total return for June slowed to 1.1% from 1.2% in the previous month. Capital growth slowed marginally to 0.6%, taking the year to date increase in property values to 6.8%. Overall, yields were stable over the month.

Offices continued to out-perform this month, with total returns of 1.3% and a capital uplift of 0.8%. This relative strength was again thanks to a strong month for Central London offices, with total returns of 1.8% for the second consecutive month as capital values grew by 1.3%. Offices outside central London continued to under-perform in June, with total returns of 0.5% and 0.7% for Rest of UK and Outer London / M25 markets respectively; both markets saw flat or muted capital growth in June.

Industrials were the worst performing sector in June with a total return of 0.6% and no capital growth. This is a further slowdown from the previous month, where total returns were 0.9%, with total returns for the year to date lagging the other sectors at 7.2% compared with 10.4% and 12% for All Retail and All Office respectively.

Retail performance was resilient in June; with a further 1.1% total return and capital growth of 0.6%. All three retail sub-sectors shared similar results in June, marking a relative improvement for High-Street shops which have underperformed so far in 2010.

All Property rental values fell by 0.1% again this month, a second consecutive fall of this amount following a tough start to the year for occupier markets. However, some occupier markets showed signs of improvement in June, with the office market leading the way with the first month of positive rental growth since February 2008. Central London offices continued to outperform, with rental growth of 0.5% following 0.2% last month.

Nick Parker, Economics and Investment Senior Analyst for CB Richard Ellis UK, said: “The property investment market is clearly slowing, with investors turning more cautious and yields flattening. Outside Central London, occupier markets remain fragile. The greater improvement seen in London’s occupier markets has saved it from the same fate as some of the regional markets in the second quarter of 2010. With the summer months now upon us, a further slowdown in investor activity could have an impact on competition for property and trends in yields.”