U.K. Commercial Property Prices Increased at Slower Pace in May

U.K. commercial property prices rose at the slowest pace in 16 months in May as public spending cuts deterred companies from renting additional space, Investment Property Databank Ltd. said.

The average value of stores, offices and warehouses increased 2.3 percent from a year earlier, the London-based research company said today on its website. That compares with a 2.7 percent gain in April and is the smallest increase since January 2010, when there was a 1.7 percent drop. The monthly increase was 0.1 percent, the same as the prior month, IPD said.

The U.K. government’s plans to reduce a record deficit with the biggest spending cuts since World War II may hurt economic growth in 2011 and 2012. Real-estate values are 35 percent below their peak in June 2007, according to IPD.The total return, including price gains and rental income, remained at 0.7 percent in May from the prior month, IPD said.

The index was compiled from 3,642 properties valued at 33.9 billion pounds ($56 billion) at the end of May, IPD said.

 

Source:bloomberg