The All Property Average Yield and all regional yields were unchanged over the quarter which last occurred in 1994. Downward pressure is present with increased investment activity in the best towns but this has not yet fed through to average yields. A fall in the benchmark gilt yield caused the reverse yield gap to close, continuing the movement seen in the last quarter.
The Retail sector yield has remained stable for two successive quarters. Central London has been unchanged for 18 months, reflecting strong rental growth. West Midlands was the only region to maintain the 1995 yield level, whilst others experienced rising yields in the year to November.
The Office sector is the most stable of the three, with Central London static since mid-1994. Across all regions, no change above 0.1% occurred. The movement over the last 12 months has been marginally downwards but too slight to show in the figures.
Over the year, some regional Industrial yields fell marginally but not enough to change the All Industrial yield. Against this backdrop, Scotland increased by 0.4% .
Figures are rounded up to one decimal place. Average Yields are compiled assuming rack-rented properties, located in prime positions of towns and no more than five years old (with the exception of high street retail).
Average Yields
Nov 1994 Feb 1995 May 1995 Aug 1995 Nov 1995 Feb 1996
Shops 6.0 6.2 6.5 6.5 6.6 6.7
Offices 6.9 6.9 6.9 6.9 6.9 6.9
Industrials 8.1 8.4 8.5 8.5 8.5 8.5
All Property 7.3 7.4 7.5 7.5 7.5 7.6
Gilt Yield 8.8 8.7 8.6 8.4 8.2 7.9
Equity Yield 3.9 4.1 4.1 3.9 3.9 3.7
Actual
Change
May 1996 Aug 1996 Nov 1996 Aug 96-Nov 96 Nov 95-Nov 96
Shops 6.9 6.9 6.9 0.0 0.4
Offices 6.9 6.8 6.8 0.0 -0.0
Industrials 8.4 8.4 8.4 0.0 -0.0
All Property 7.7 7.7 7.7 0.0 0.2
Gilt Yield 8.3 8.2 7.9 -0.3 -0.3
Equity Yield 3.7 3.9 3.8 -0.1 -0.1
Average Yields
Nov Feb May Aug Nov Feb
1994 1995 1995 1995 1995 1996
All Shops 6.0 6.2 6.5 6.5 6.6 6.7
Central London 5.1 5.1 5.2 5.2 5.2 5.2
Inner SubLondon 8.5 8.7 9.0 9.1 9.1 9.2
Outer Sub London 6.9 7.1 7.3 7.4 7.4 7.5
Suburban London 7.7 7.9 8.2 8.2 8.2 8.4
London 6.7 6.8 7.0 7.0 7.0 7.0
South East. 5.4 5.6 5.9 6.0 6.0 6.1
South West. 5.1 5.3 5.6 5.6 5.6 5.8
East Anglia. 5.2 5.4 5.7 5.7 5.7 5.9
East Midlands. 5.5 5.7 6.1 6.1 6.1 6.3
West Midlands. 5.1 5.2 5.4 5.4 5.4 5.5
Wales. 6.3 6.5 6.7 6.8 6.8 6.9
North West. 5.5 5.7 5.9 6.0 6.0 6.0
Yorks & Humbs 5.5 5.7 5.9 6.0 6.0 6.2
North. 5.6 5.8 6.1 6.2 6.2 6.3
Scotland. 6.3 6.2 6.3 6.4 6.4 6.4
All Offices 6.9 6.9 6.9 6.9 6.9 6.9
West End 5.4 5.4 5.3 5.3 5.3 5.3
Holborn/
Marylebone. 7.1 7.0 6.8 6.8 6.8 6.8
Central City 5.3 5.3 5.3 5.3 5.3 5.3
Fringe City 7.1 7.0 7.0 7.0 7.0 7.0
Central London 5.9 5.9 5.9 5.9 5.9 5.9
Suburban London 7.0 6.9 6.9 6.9 6.9 6.8
London 6.2 6.2 6.1 6.1 6.1 6.1
South East. 7.0 6.8 6.8 6.8 6.8 6.8
South West. 7.5 7.5 7.5 7.5 7.5 7.5
East Anglia. 7.3 7.2 7.3 7.3 7.3 7.3
East Midlands. 7.7 7.7 7.8 7.8 7.8 7.8
West Midlands. 7.3 7.3 7.3 7.3 7.3 7.3
Wales. 8.2 8.2 8.3 8.3 8.3 8.3
North West. 8.0 8.0 8.0 8.0 8.0 8.0
Yorks & Humbs 7.5 7.5 7.5 7.5 7.5 7.5
North. 8.2 8.2 8.3 8.3 8.3 8.3
Scotland. 6.6 6.6 6.7 6.7 6.8 6.8
All Industrials 8.1 8.4 8.5 8.5 8.5 8.5
London 7.5 7.8 7.8 7.8 7.8 7.8
South East. 7.2 7.5 7.5 7.5 7.5 7.5
South West. 7.9 8.2 8.2 8.2 8.2 8.2
East Anglia. 7.8 8.2 8.2 8.2 8.2 8.2
East Midlands. 7.6 8.0 8.0 8.0 8.0 8.0
West Midlands. 7.9 8.2 8.2 8.2 8.2 8.2
Wales. 8.3 8.6 8.6 8.6 8.6 8.6
North West. 8.2 8.5 8.5 8.5 8.5 8.5
Yorks & Humbs 8.1 8.4 8.4 8.4 8.4 8.4
North. 8.6 8.8 8.8 8.8 8.8 8.8
Scotland. 8.8 8.5 8.6 8.8 8.8 8.9
May Aug Nov Aug 96- Nov 95-
1996 1996 1996 Nov 96 Nov 96
All Shops 6.9 6.9 6.9 0.0 0.4
Central London 5.2 5.2 5.2 0.0 0.0
Inner SubLondon 9.4 9.4 9.4 0.0 0.3
Outer Sub London 7.7 7.7 7.7 0.0 0.3
Suburban London 8.6 8.6 8.6 0.0 0.3
London 7.1 7.1 7.1 0.0 0.2
South East 6.5 6.5 6.5 0.0 0.5
South West. 6.0 6.0 6.0 0.0 0.4
East Anglia. 6.1 6.1 6.1 0.0 0.4
East Midlands 6.6 6.5 6.5 0.0 0.4
West Midlands 5.8 5.8 5.8 0.0 0.0
Wales. 7.2 7.2 7.2 0.0 0.5
North West. 6.3 6.3 6.3 0.0 0.3
Yorks & Humbs 6.4 6.4 6.4 0.0 0.3
North. 6.4 6.4 6.4 0.0 0.3
Scotland. 6.5 6.5 6.5 0.0 0.1
All Offices 6.9 6.8 6.8 0.0 -0.0
West End 5.3 5.3 5.3 0.0 0.0
Holborn/
Marylebone. 6.8 6.8 6.8 0.0 0.0
Central City 5.3 5.3 5.3 0.0 0.0
Fringe City 7.0 7.0 7.0 0.0 0.0
Central London 5.9 5.9 5.9 0.0 0.0
Suburban London 6.8 6.8 6.8 0.0 -0.1
London 6.1 6.1 6.1 0.0 -0.0
South East. 6.8 6.8 6.8 0.0 -0.1
South West. 7.5 7.5 7.5 0.0 0.0
East Anglia. 7.3 7.3 7.3 0.0 0.0
East Midlands. 7.8 7.8 7.8 0.0 0.0
West Midlands. 7.1 7.1 7.1 0.0 -0.1
Wales. 8.2 8.2 8.2 0.0 -0.1
North West. 7.9 7.9 7.9 0.0 -0.1
Yorks & Humbs 7.4 7.4 7.4 0.0 -0.1
North. 8.2 8.2 8.2 0.0 -0.1
Scotland. 6.8 6.9 6.8 0.0 0.1
All Industrials 8.4 8.4 8.4 0.0 -0.0
London 7.7 7.7 7.7 0.0 -0.0
South East. 7.5 7.5 7.5 0.0 -0.1
South West. 8.2 8.2 8.2 0.0 -0.0
East Anglia. 8.2 8.2 8.2 0.0 -0.0
East Midlands. 7.9 7.9 7.9 0.0 -0.1
West Midlands 8.1 8.1 8.1 0.0 -0.1
Wales. 8.6 8.6 8.6 0.0 0.0
North West. 8.4 8.4 8.4 0.0 -0.2
Yorks & Humbs 8.3 8.3 8.3 0.0 -0.1
North. 8.8 8.8 8.8 0.0 0.0
Scotland. 9.0 9.2 9.2 0.0 0.4
For further information, contact: Alan Patterson, Head of Investment Research, Tel: +44 (0) 171 629 7666, Fax: +44 (0) 171 409 3016
