This is the highest monthly increase of 2014 and also the highest since the recovery in valuations began in May 2013.
IPD UK Monthly Property Index data show values have risen by 10.1% over the past 14 months of growth, but remain well below the peaks of 2007.
The asset class is outperforming the core classes of equities and bonds. UK commercial property returned 2.1% for the month with income return at 0.5%, versus bonds which returned -0.7% and equities at -1.3%.
Offices and industrials were at the forefront of this both returning 2.5% in June, followed as has been consistently the case by retail, which returned 1.6% overall for the month.
The best performing specific assets have been in outer London offices and industrials in the outer South-East, both returning 3.2% in June. Retail outside of the outside the South-East was the weakest, returning just 1.0%.
“June 2014 was very good month for investors in UK commercial real estate, with returns matching their highest levels of the current recovery,” Phil Tily, IPD’s head of UK and Ireland said. “Encouragingly, performance is being bolstered by strengthening occupier markets, while yields remain competitive with other asset classes,” he added.
The IPD UK Monthly Property Index tracks performance of 3412 property investments with a total value of £38.2 billion as of June.
