Whilst the All Property Average Yield was unchanged over the quarter, a fall in the benchmark gilt yield caused the reverse yield gap to close, implying a fall in property's relative pricing. On this measure, the latest figures might come as a disappointment to those who had thought that February signalled a low point and that property was starting to make a recovery.
The Retail sector yield was unchanged this quarter after two consecutive increases. This might suggest that this sector is now stabilising. This pattern is repeated in 10 of the 15 regions. Central London (with the lowest yield) is unchanged from 1995's second quarter figure, reflecting its significant rental value growth and higher investor confidence. Yield increases have been broadly based; 75% of all locations rose over the last 12 months.
In the Office sector, against a backdrop of static yields, Scotland continued to record increases over both the three and 12-month periods. Although South East yields are generally static, several locations are experiencing marginal falls in yields, so far in 1996.
Overall, Industrial yields were unchanged-although this sector had the largest number of locations showing an inconsistent situation of rising rents and yields.
AMENDMENTS TO DATA
A reappraisal of historic data has resulted in amended figures. Specific figures which have altered are: All Offices (Feb 96 & May 96) , All Retail (Nov 95), All Industrial (May 95), Retail: West Midlands (Aug 94 to Feb 96), Offices: North West (Aug 94) and Industrial: West Midlands (Aug 94).
AVERAGE YIELDS (figures are rounded to 1 decimal place)
Aug Nov Feb May Aug Nov Feb May Aug
94 94 95 95 95 95 96 96 96
Shops 6.0 6.0 6.2 6.5 6.5 6.6 6.7 6.9 6.9
Offices 7.0 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.8
Industrial 7.9 8.1 8.4 8.5 8.5 8.5 8.5 8.4 8.4
All Property 7.2 7.3 7.4 7.5 7.5 7.5 7.6 7.7 7.7
Gilt Yield 8.7 8.8 8.7 8.6 8.4 8.2 7.9 8.3 8.2
Equity Yield 3.8 3.9 4.1 4.1 3.9 3.9 3.7 3.7 3.9
Actual Change
May 96-Aug 96 Aug 95 - Aug 96
Shops 0.0 0.4
Offices 0.0 0.0
Industrial 0.0 0.0
All Property 0.0 0.2
Gilt Yield -0.1 -0.2
Equity Yield 0.2 0.0
AVERAGE YIELDS (figures are rounded to 1 decimal place)
Aug Nov Feb May Aug Nov Feb May Aug
1994 1994 1995 1995 1995 1995 1996 1996 1996
All Shops 6.0 6.0 6.2 6.5 6.5 6.6 6.7 6.9 6.9
Central London 5.0 5.1 5.1 5.2 5.2 5.2 5.2 5.2 5.2
Inner Sub London.8.4 8.5 8.7 9.0 9.1 9.1 9.2 9.4 9.4
Outer Sub London.6.9 6.9 7.1 7.3 7.4 7.4 7.5 7.7 7.7
Suburban London 7.7 7.7 7.9 8.2 8.2 8.2 8.4 8.6 8.6
London 6.6 6.7 6.8 7.0 7.0 7.0 7.0 7.1 7.1
South East. 5.4 5.4 5.6 5.9 6.0 6.0 6.1 6.5 6.5
South West. 5.1 5.1 5.3 5.6 5.6 5.6 5.8 6.0 6.0
East Anglia. 5.2 5.2 5.4 5.7 5.7 5.7 5.9 6.1 6.1
East Midlands. 5.5 5.5 5.7 6.1 6.1 6.1 6.3 6.6 6.5
West Midlands. 5.1 5.1 5.2 5.4 5.4 5.4 5.5 5.8 5.8
Wales. 6.2 6.3 6.5 6.7 6.8 6.8 6.9 7.2 7.2
North West. 5.5 5.5 5.7 5.9 6.0 6.0 6.0 6.3 6.3
Yorks & Humbs 5.4 5.5 5.7 5.9 6.0 6.0 6.2 6.4 6.4
North. 5.6 5.6 5.8 6.1 6.2 6.2 6.3 6.4 6.4
Scotland. 6.3 6.3 6.2 6.3 6.4 6.4 6.4 6.5 6.5
Actual Change
May 96 - Aug 96 Aug 95 - Aug 96
All Shops 0.0 0.4
Central London 0.0 0.0
Inner Sub London.0.0 0.3
Outer Sub London.0.0 0.3
Suburban London 0.0 0.3
London 0.0 0.2
South East. 0.0 0.5
South West. 0.0 0.4
East Anglia. 0.0 0.4
East Midlands. 0.0 0.4
West Midlands. 0.0 0.4
Wales. 0.0 0.5
North West. 0.0 0.3
Yorks & Humbs 0.0 0.4
North. 0.0 0.3
Scotland. 0.0 0.1
All Offices 7.0 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.8
West End 5.4 5.4 5.4 5.3 5.3 5.3 5.3 5.3 5.3
Holborn/
Marylebone. 7.1 7.1 7.0 6.8 6.8 6.8 6.8 6.8 6.8
Central City 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3
Fringe City 7.1 7.1 7.0 7.0 7.0 7.0 7.0 7.0 7.0
Central London 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9
Suburban London 7.0 7.0 6.9 6.9 6.9 6.9 6.8 6.8 6.8
London 6.2 6.2 6.2 6.1 6.1 6.1 6.1 6.1 6.1
South East. 7.0 7.0 6.8 6.8 6.8 6.8 6.8 6.8 6.8
South West. 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5
East Anglia. 7.5 7.3 7.2 7.3 7.3 7.3 7.3 7.3 7.3
East Midlands. 7.9 7.7 7.7 7.8 7.8 7.8 7.8 7.8 7.8
West Midlands. 7.4 7.3 7.3 7.3 7.3 7.3 7.3 7.1 7.1
Wales. 8.3 8.2 8.2 8.3 8.3 8.3 8.3 8.2 8.2
North West. 8.2 8.0 8.0 8.0 8.0 8.0 8.0 7.9 7.9
Yorks & Humbs 7.6 7.5 7.5 7.5 7.5 7.5 7.5 7.4 7.4
North. 8.3 8.2 8.2 8.3 8.3 8.3 8.3 8.2 8.2
Scotland. 6.7 6.6 6.6 6.7 6.7 6.8 6.8 6.8 6.9
Actual Change
May 96 - Aug 96 Aug 95 - Aug 96
All Offices 0.0 0.0
West End 0.0 0.0
Holborn/
Marylebone. 0.0 0.0
Central City 0.0 0.0
Fringe City 0.0 0.0
Central London 0.0 0.0
Suburban London 0.0 -0.1
London 0.0 -0.0
South East. 0.0 -0.1
South West. 0.0 0.0
East Anglia. 0.0 0.0
East Midlands. 0.0 0.0
West Midlands. 0.0 -0.1
Wales. 0.0 -0.1
North West. 0.0 -0.1
Yorks & Humbs 0.0 -0.1
North. 0.0 -0.1
Scotland. 0.0 0.2
All Industrials 7.9 8.1 8.4 8.5 8.5 8.5 8.5 8.4 8.4
London 7.3 7.5 7.8 7.8 7.8 7.8 7.8 7.7 7.7
South East. 7.0 7.2 7.5 7.5 7.5 7.5 7.5 7.5 7.5
South West. 7.6 7.9 8.2 8.2 8.2 8.2 8.2 8.2 8.2
East Anglia. 7.5 7.8 8.2 8.2 8.2 8.2 8.2 8.2 8.2
East Midlands. 7.3 7.6 8.0 8.0 8.0 8.0 8.0 7.9 7.9
West Midlands. 7.7 7.9 8.2 8.2 8.2 8.2 8.2 8.1 8.1
Wales. 8.1 8.3 8.6 8.6 8.6 8.6 8.6 8.6 8.6
North West. 8.0 8.2 8.5 8.5 8.5 8.5 8.5 8.4 8.4
Yorks & Humbs 7.9 8.1 8.4 8.4 8.4 8.4 8.4 8.3 8.3
North. 8.5 8.6 8.8 8.8 8.8 8.8 8.8 8.8 8.8
Scotland. 8.7 8.8 8.5 8.6 8.8 8.8 8.9 9.0 9.2
Actual Change
May 96 - Aug 96 Aug 95 - Aug 96
All Industrials 0.0 0.0
London 0.0 0.0
South East. 0.0 -0.1
South West. 0.0 0.0
East Anglia. 0.0 0.0
East Midlands. 0.0 -0.1
West Midlands. 0.0 -0.1
Wales. 0.0 0.0
North West. 0.0 -0.2
Yorks & Humbs 0.0 -0.1
North. 0.0 0.0
Scotland. 0.0 0.4
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information please contact Alan Patterson on 0171 629 7666 extension 2376, or write to him at Hillier Parker, 77 Grosvenor Street, London W1A 2BT.
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