Commercial property values rose in the U.K. in May marking the end of an 18-month lag in the sector, according to a property index of Investment Property Data, a real estate intelligence firm.
Occupancy rates and trading activity in the commercial real estate sector continued to improve to record a small 0.01 percent increase in May. The minute growth is attributed to the slow albeit steady demand from foreign investors and the constant efforts of banks to increase lending activity, reports Bloomberg.
According to DigitalOutlook.com, values of commercial buildings have been falling from November 2011 accounting for an average drop of 4.9 percent till date. However, total returns on these properties rose 0.6 percent in May. Moreover, rental values of offices and other commercial buildings like warehouses and industrial spaces rose on an average of 7.6 percent throughout the country.
Experts believe that though the growth is very small, it is still a start.
"It may seem like insignificant growth, but this is an important milestone for the U.K. property market. After the double-dip recession and a fall in values of over 37 percent, U.K. property has finally, painstakingly, clawed itself back to growth," Phil Tily, a managing director at IPD said in a statement.
Also, in a recent survey conducted by CBRE Group, the world's largest commercial real estate services firm, it analyzed the ten top cities around the world that had the highest rental values. London came in second in the list with rents as high as $19.61 per square feet.
Industry bigwigs are however divided on the issue of growth in the sector. While some think that 2013 will be a major turning point for the property market of U.K with an average forecasted return of 6.5 percent, other are skeptical about such an elaborate growth rate in such a short time span, reports The Financial Times.