Office space values across the UK continued to grow in February, new data shows.
According to figures released by CB Richard Ellis, commercial property values were up 1.4 per cent last month.
However, rental price growth for the sector remained subdued during the period, falling by 0.2 per cent.
Central London rents, meanwhile, remained static, as difficult operating conditions for companies continued to impact on demand in the capital.
Despite this, offices in the heart of London yielded total returns of 2.6 per cent and capital growth of 2.1 per cent – making them the month’s best performers.
Nick Parker, an analyst at CBRE, said: “The general sentiment in the market currently is that property is approaching fair value, with ongoing yield compression expected in the short term.”
“It is widely expected that the yield gap between prime and secondary property will slowly narrow over 2010 as competition for good secondary assets becomes more heated.”