The quarterly change in the All Property Rent Index, of 0.7 percentage points, is the lowest since 1995. However, the Equity Dividend Index fell (-0.9%) for the first time since 1993. The Office sector's relatively strong recent growth produced a higher rental value annual increase (8%) than Equity Dividend growth (7.8%), which has not occurred since 1993.
At 0.5%, the Retail sector's quarterly rental value growth is the lowest since 1995. However, five-year rental value growth is positive for the first time since 1994. Polarisation is continuing in the market as growth is concentrated in London and the South East. Indeed, Central London's quarterly increase (4.6%) was marginally higher than the previous seven-year high seen in November. Scotland was static over the quarter after November's five-year high. East Anglia was unchanged after relatively strong growth in the previous two surveys, though it still produced the highest regional annual change.
Office quarterly growth (1.2%) fell back on November's figure, though the annual change remained the same (8%), which is a six-year high. The West End's recent growth is strong enough to have produced its first positive five-year figure since 1993. There is a relative absence of growth over the quarter, outside London and the South East. Scotland again runs counter to the trend registering decreases in rental value over the quarter.
Quarterly growth in Industrial rents (0.2%) is the lowest for four quarters. As in other sectors, geographical concentration of growth is occurring as it is confined to the southern areas. East Anglia was alone in registering a fall (3%) over the quarter.
There has been a reappraisal of historic data. The areas affected are Offices: Suburban London (Nov 96) and West Midlands (Nov 96).
Rent Index - Current Prices
% Change Qtr Annual pa Aug 96 Nov 96 Feb 97 Nov 96 Feb 96 Feb 92 -Feb 97 -Feb 97 - Feb 97 All Property 420 424 427 0.7 4.8 -0.8 Shops 574 580 583 0.5 3.3 0.1 Offices 336 342 346 1.2 8.0 -1.0 Industrials 344 345 346 0.2 1.6 -1.4 Equity Dividend 709 725 719 -0.9 7.8 7.2Rent Index - Real Terms
% Change Qtr Annual pa Aug 96 Nov 96 Feb 97 Nov 96 Feb 96 Feb 92 -Feb 97 -Feb 97 - Feb 97 All Property 126 127 127 0.2 2.3 -3.2 Shops 173 174 174 0.0 0.9 -2.4 Offices 101 103 103 0.7 5.5 -3.5 Industrials 104 103 103 -0.3 -1.2 -3.9 Equity Dividend 213 217 214 -1.4 4.7 4.5 Rent Index - Regional
Aug 96 Nov 96 Feb 97 All Shops 574 580 583 Central London 576 601 629 Inner Suburban London 481 486 490 Outer Suburban London 512 518 519 Suburban London 500 505 507 London 542 555 568 South East 581 582 583 South West 563 563 564 East Anglia 744 758 758 East Midlands 462 464 467 West Midlands 725 727 727 Wales 741 742 742 North West 576 577 581 Yorks & Humber 489 491 493 North 582 586 586 Scotland 527 544 544 All Offices 336 342 346 West End 467 482 493 Holborn & Marylebone 358 365 375 Central City 305 310 314 Fringe City 289 301 305 Central London 359 368 374 Suburban London 303 307 310 London 340 348 353 South East 342 346 350 South West 611 611 611 East Anglia 316 320 320 East Midlands 363 365 365 West Midlands 705 718 718 Wales 435 443 443 North West 460 461 464 Yorks & Humber 372 372 376 North 269 269 269 Scotland 429 428 427 All Industrials 344 345 346 London 371 371 373 South East 406 410 410 South West 400 400 407 East Anglia 369 369 357 East Midlands 379 375 375 West Midlands 357 357 357 Wales 321 321 321 North West 315 315 315 Yorks & Humber 263 264 264 North 253 253 253 Scotland 292 293 293 % Change Qtr Qtr Annual p.a. Aug 96- Nov 96- Feb96 - Feb 92 Nov 96 Feb 97 Feb 97 Feb 97 All Shops 0.9 0.5 3.3 0.1 Central London 4.4 4.6 12.7 5.9 Inner Suburban London 0.9 0.9 3.6 -0.1 Outer Suburban London 1.0 0.2 3.0 -1.1 Suburban London 1.0 0.4 3.3 -0.8 London 2.5 2.3 7.5 2.0 South East 0.1 0.2 2.0 -1.2 South West 0.0 0.2 1.5 -0.3 East Anglia 2.0 0.0 5.8 0.7 East Midlands 0.4 0.8 2.7 -1.0 West Midlands 0.2 0.0 2.6 -0.6 Wales 0.2 0.0 1.2 -0.4 North West 0.1 0.8 3.6 2.3 Yorks & Humber 0.4 0.6 3.5 -0.2 North 0.7 0.0 1.7 1.1 Scotland 3.1 0.0 4.5 2.6 All Offices 1.8 1.2 8.0 -1.0 West End 3.1 2.2 13.4 0.7 Holborn & Marylebone 1.8 2.7 14.9 -2.2 Central City 1.7 1.2 14.5 -0.6 Fringe City 4.3 1.1 6.9 -4.3 Central London 2.6 1.7 13.1 -0.8 Suburban London 1.2 1.1 5.2 -1.7 London 2.3 1.6 11.5 -1.0 South East 1.3 1.1 4.5 -1.2 South West 0.0 0.0 2.6 -2.1 East Anglia 1.2 0.0 1.2 -3.7 East Midlands 0.6 0.0 0.6 -0.5 West Midlands 1.8 0.0 1.8 -1.4 Wales 1.7 0.0 6.2 0.2 North West 0.3 0.6 1.4 0.7 Yorks & Humber 0.0 0.0 1.2 1.4 North 0.0 0.0 0.0 1.1 Scotland -0.2 -0.2 -5.9 -1.3 All Industrials 0.3 0.2 1.6 -1.4 London 0.0 0.6 1.2 -2.2 South East 0.9 0.1 2.6 -1.9 South West 0.0 1.8 2.7 -0.7 East Anglia 0.0 -3.0 -3.0 -3.9 East Midlands -1.3 0.0 0.2 -1.2 West Midlands 0.0 0.0 0.9 0.8 Wales 0.0 0.0 2.5 1.2 North West 0.0 0.0 -0.9 -1.1 Yorks & Humber 0.5 0.0 3.9 -0.4 North 0.0 0.0 0.0 1.6 Scotland 0.2 0.0 -0.3 4.3
For further information, contact: Alan Patterson, Head of Investment Research, Tel: +44 (0) 171 629 7666, Fax: +44 (0) 171 409 3016