Bleak Commercial Forecast by CBRE

According to the latest CBRE Monthly Index data, capital values decreased by a staggering -3% in March, amidst the onset of the coronavirus hitting British shores.

Unsurprisingly, March’s results showed that the Retail sector suffered the most, with an overall -5.1% decrease in capital values over the month, the most substantial decline within retail was for Shopping Centres which hit an unprecedented low of -6.7%.

Commenting on this month’s bleak report, Toby Radcliffe, Research Analyst at CBRE UK, said: “The CBRE Monthly Index gives the first real-time glimpse into the impact of COVID-19 on UK real estate valuations.”

Radcliffe continues: “At the ‘all property’ level, capital values fell by -3.0% 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.”