Oct. 14 (Bloomberg) -- U.K. commercial real estate prices rose at a slower pace in September, held back by retail buildings, Investment Property Databank Ltd. said.
The average value of stores, offices and warehouses increased 1.7 percent in September from a year earlier, London- based IPD said today on its website. That compares with a 1.8 percent increase in August. Prices rose 0.1 percent from the previous month.
U.K. commercial real-estate values have increased for 26 straight months. Investors are starting to look outside central London, where buildings have appreciated most, to “find more competitive assets,” IPD said.
“Occupier demand remained strong across the London office market,” said Phil Tily, IPD’s managing director for the U.K. and Ireland, and “growth seems to be off the back of continuing rental increases.”
The total return, which combines the change in property values and rental income, amounted to 8.7 percent in September from a year earlier, the research company said.
“Despite growing concerns over a pricing bubble in the Central London office market,” total returns for September were 0.6 percent, IPD said.
The index was compiled from appraisals of 3,663 properties valued at 34.5 billion pounds ($54.6 billion) at the end of September, IPD said.
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