We've started to see some feedback trickling through from analysts on yesterday's release of the September IPD Monthly Index.
UK commercial property values climbed 1.1% in September - the largest monthly capital growth since June 2006.
In its morning note today, Morgan Stanley said the jump did not come as a surprise as CBRE, which values over a third of the monthly IPD sample, reported a 1.3% increase in property values for September earlier this month.
"What is significant is that a change in capital values of this magnitude tends to be followed by more significant capital growth; taking all the historic monthly occurrences of +1.1% capital growth or more, the average return in the subsequent three months is +4.2%, in 6 months +7.7%, 12 months +12.6%," the broker said.
"Therefore, this could suggest a bounce - or for the bullish, a recovery - in capital values is under way.
"The Morgan Stanley research team has assumed a 10% bounce in UK capital values on average during 2010, and it now looks as though this is happening, or at least starting, earlier than expected."
"We also note that while the overall capital gain was 1.2% for the quarter, we believe that listed companies should generally beat the index, given the quality of their portfolios (and expect more +2-3%)," he said.
"In addition, offices have underperformed over the month, but we believe they will catch up in a few months, when we expect to see more signs of rent stabilization."
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