October 2004
10 year high for IPD Monthly Index All Property Total Return
The IPD Monthly Index All Property Total Return continued to
rise over a twelve-month period reaching 17.4% to the end-October. The
last time the UK property market recorded a return this high was 10 years
ago; at that point returns were slowing after the peak in
mid-1994.
Looking over a three-month period, returns are slowing across all three sectors after a
high in July. Although yields are still falling, their impact is not as
strong as a few months ago, and thus capital growth has slowed. Rental
values however, have been improving very slightly since the three months
to July.
With the FTSE All Share having another reasonable month in October, they are now the top
performing asset class over three months at 5.8%. Gilts are also recovering over a twelve-month
period from the low seen in May and now have a return of 7.0%.
Office rental values have been recovering since February 2003 when they dropped by 2.9%
over three months. For the quarter to October, office rental value growth is now positive for
the first time since December 2001. Meanwhile both retail and industrial rental values have been fairly
static.
The Monthly Index is based on property unit trusts, pooled pension schemes and unit-linked
insurance funds - a sample of thousands of properties, and 19% of the total UK market.
The Monthly Index is a fast-moving indicator of current market conditions. The headline results are
the standard measure of UK property published in the Financial Times.
| |
Property
IPD |
Equities
FTSE All Share |
Gilts
FTSE 5-15 year |
| Total return % over the last |
| 12 months |
17.4 |
11.6 |
7.0 |
| 6 months |
9.6 |
4.3 |
4.1 |
| 3 months |
4.3 |
5.8 |
3.8 |
| 1 month |
1.3 |
1.2 |
1.0 |
| |
| Year to date: |
14.8 |
7.1 |
4.3 |
Source: IPD-Investment Property Databank
| Sector Results |
| |
All Property |
Retail |
Office |
Industrial |
| over the last month: |
| total return |
1.3 |
1.4 |
1.1 |
1.2 |
| income return |
0.5 |
0.5 |
0.6 |
0.6 |
| capital growth |
0.8 |
1.0 |
0.5 |
0.6 |
| rental value growth |
0.2 |
0.3 |
0.1 |
0.1 |
| yield impact |
0.65 |
0.66 |
0.64 |
0.54 |
over the last 3 months: |
| total return |
4.3 |
4.7 |
3.6 |
4.0 |
| income return |
1.6 |
1.5 |
1.8 |
1.8 |
| capital growth |
2.6 |
3.2 |
1.8 |
2.1 |
| rental value growth |
0.6 |
1.0 |
0.0 |
0.3 |
| yield impact |
2.16 |
2.18 |
2.14 |
1.84 |
Source: IPD-Investment Property Databank
| |
No. of Properties |
Total Capital Value £m |
% Total Capital Value |
| All Retails |
1435 |
14597.5 |
57.8 |
| Std Retails-South East |
420 |
1748.6 |
6.9 |
| Std Retails- Rest of UK |
558 |
2300.6 |
9.1 |
| Shopping Centres |
111 |
3927.4 |
15.6 |
| Retail Warehouses |
346 |
6620.9 |
26.2 |
| All Offices |
731 |
6027.4 |
23.9 |
| City |
56 |
1252.7 |
5.0 |
| West End |
102 |
999.2 |
4.0 |
| Rest of South East |
351 |
2373.1 |
9.4 |
| Rest of UK |
222 |
1402.4 |
5.6 |
| All Industrial |
743 |
4181.9 |
16.6 |
| South Eastern |
375 |
2436.6 |
9.7 |
| Rest of UK |
368 |
1745.2 |
6.9 |
| Other Property |
135 |
437.3 |
1.7 |
| All Property |
3044 |
25244.1 |
100.0 |
Source: IPD-Investment Property Databank
Source: IPD-Investment Property Databank
|
