Capital values across the UK’s commercial property sectors weakened by 3.8% during the second quarter, after dipping by 0.7% in June.

Values fell 6.9% during the first half of the year, according to the latest CBRE monthly index.

However, CBRE highlighted that value declines showed signs of easing in June.

Rental values decreased by 0.3%, marking a 1% quarterly fall. June total returns were -0.2%, bringing Q2 returns to -2.4%.


In retail, capital values fell by 1.4% in June, with shopping centres posting a 2.4% reduction. During Q2 overall values dropped by 6.6%, reflecting a 12.9% slump in the first half of the year.

CBRE said this was the steepest H1 fall in the sector seen since 2009.

Rental values declined by 0.8% over the month, and total returns were -0.8%; total returns over Q2 were -4.9%.


The office sector posted a 0.2% capital value decrease during June. Capital values were down by 1.9% over the quarter, and by 3.1% in H1 2020.

The West End and midtown offices proved to be the most resilient subsector in Q2, down by 1.7%.

Average rental values for the sector fell by 0.1% in June, and by 0.2% during Q2. Total returns were 0.2% for the month, edging into positive territory for the first time since February. Returns for the quarter were -0.8%.


By sector, industrial continued to demonstrate the greatest resilience.

Capital values inched down by just 0.1% in June. Capital values fell by 1.3% over the quarter, and by 2.3% during H1.

Rental values have been growing. In June, rental values grew by 0.2%, driven by performance in the South East. Rental growth in Q2 was 0.3%. Total returns for the month were 0.3%, levelling out at 0% over the quarter.

Toby Radcliffe, research analyst at CBRE, said: “The June monthly index has confirmed that overall Q2 2020 saw a larger decline in rental and capital values than Q1.

“This was the case for all sectors except retail, where capital values fell slightly more during the first quarter.”

However, Radcliffe said there is “reason to hope that Q2 represents the trough in Covid-19-related value decreases”.

“June has seen a continuation of the easing in capital and rental value declines, and as more non-essential businesses reopen their doors throughout July, further gains in Q3 seem possible,” he said.