Capital values fell by 3% across all UK commercial property in March, according to the latest CBRE Monthly Index.

Retail property took the biggest hit, with values falling 5.1% over the month. Retail rental values were also down, by 0.7%. 

Office capital values fell by 1.6%, but rental value growth remained positive at 0.1%. Similarly, industrial capital values fell -1.6%, while rental values increased 0.1%.

Toby Radcliffe, research analyst at CBRE, said: “The CBRE Monthly Index gives the first real-time glimpse into the impact of Covid-19 on UK real estate valuations. At the all property level, capital values fell by -3% in March. Monthly falls of this magnitude are extremely rare, unprecedented outside of the global financial crisis and the immediate aftermath of the Brexit vote in 2016.

“In the latter case values fell by -3.3% in July before returning to growth by October. In 2008 on the other hand, Lehman’s collapse in mid-September presaged a -2.8% fall in values for the month, followed by falls of more than -4.5% in each of the following three months. The scale of the current Covid-19 crisis and its impact on GDP has far more in common with the GFC than with Brexit; it remains to be seen if real estate will behave similarly.”