UK comm. prop. rebound further weakens in May-CBRE

* Average values rise 0.7 pct last month vs. 1 pct in April

* Investors more cautious as UK market seen fully priced

LONDON, June 4 (BestGrowthStock) – Britain’s commercial property
recovery slowed further in May, with investor doubts about the
sustained health of the market hitting transaction volumes and
slowing price growth, a report said on Friday.

The latest Monthly Index from CB Richard Ellis (CBG.N: ), the
world’s largest real estate advisor, showed capital growth
slowed to 0.7 percent in May after a 1 percent increase in
April, taking the year-to-date increase to 6.2 percent.

The all property total return for May fell to 1.2 percent
from 1.6 percent in the previous month, bringing the average
annual return for UK commercial property to 25.3 percent.

“Many investors are now increasingly cautious, feeling the
property market is fully priced, hence the slowdown in
transaction volumes in recent months,” CBRE economics and
investment analyst Nick Parker said.

A survey in May showed property experts predicted total
returns from UK commercial property to tumble by 60 percent to 6
percent in 2011, as high unemployment and tighter consumer
spending reverse the market’s 2010 upturn. [ID:nLDE64R0UI]

The strongest performing market sub-sector in May was
central London offices, delivering total returns of 1.8 percent
compared with 1.1 percent for the retail sector, although
returns in all sectors are lower than the previous month.

While investment sentiment softened, occupier markets
improved slightly in May, CBRE said, with all property rental
values falling 0.1 percent versus 0.2 percent in April, and
Central London offices posting rental growth of 0.2 percent.

Investing Tools

(Reporting by Daryl Loo; Editing by Andrew Macdonald)
(See for the global service for
real estate professionals from Reuters)

UK comm. prop. rebound further weakens in May-CBRE