Total returns for UK real estate were positive in March, data from MSCI showed, the first positive return since June last year.
The month-on-month total return in March was 0.67% (a 0.46% income return from rental income and a 0.21% capital return). Average values rose during the month after eight straight months of declines.
“The rebound was led by an increase in values for residential, industrial and retail property,” MSCI said. “Office values continued to fall as the segment comes under pressure from hybrid working trends and heightened risk of obsolescence.”
Capital values fell faster during the current period of uncertainty than during the 2008 Global Financial Crisis and late 1980s recession, MSCI said. Negative returns in October last year were the worst on record at 6.5% versus a low of 4.75% in the wake of Lehman Brothers’ collapse, driven by capital value falls in industrial and office property in particular.
“At just eight months, the slowdown is, as it stands, of much shorter duration [than the 2008 crisis],” it said in its report.