UK commercial property values drop in 2022, wiping out 2021 gains - data

By Elizabeth Howcroft and Carolyn Cohn

LONDON (Reuters) -UK commercial property capital values decreased by 13.3% as a whole in 2022, and annual total returns were down 9.1%, according to the CBRE Monthly Index published on Monday.

CBRE's index shows a sharp turnaround from 2021, when commercial property values rose 13.8% and returns rose 19.9%.

Property valuations in Britain's $1.6 trillion commercial real estate sector have come under pressure in recent months from rising interest rates and economic uncertainty.

The industrial sector was particularly hard-hit, with capital values down 21% in 2022 and annual total returns of -18.1%, CBRE's data showed.

Retail property capital values fell by 8.1% in 2022, while the office sector was down by 12.1%. Both also saw negative returns, of -2.1% and -8.3% respectively, CBRE said.

Following a surge in demand for redemptions, UK property funds managing around $18 billion worth of assets have introduced limits on investor withdrawals.

(Reporting by Carolyn Cohn and Elizabeth Howcroft; editing by David Evans)