Hillier Parker rent index

Citation

(1998), "Hillier Parker rent index", Property Management, Vol. 16 No. 2. https://doi.org/10.1108/pm.1998.11316bab.010

Hillier Parker rent index

Hillier Parker rent index

Keyword Property market

Annual growth of 8.1 per cent in the All Property Rent Index has been realised for 1997, following 2.7 per cent quarterly growth to November, according to the latest research by Hillier Parker. There was also strong real growth over the year of 4.3 per cent, with only Industrials just failing to show real rental growth over the last 12 months.

Hillier Parker comment that despite the strong performance over this quarter, there is clear evidence of continued polarisation. The high rented locations are clearly benefiting most from the rental growth.

In the Shops sector, in locations showing rental growth, the average Zone A is £104.66, compared to an overall average of £57.58. This is the only sector where there is still evidence of falling rents at locational level this quarter. These locations are some of the smaller towns, and their average rent is only £40.45. Polarisation is also occurring, to a lesser extent, in the Office and Industrial sectors.

Retail growth has increased, with Northern regions posting strong gains. In London, suburban markets are strengthening with leisure interest bidding up rents.

Growth over the last three months in the Office sector has fallen back slightly, but is buoyant at 4.1 per cent over the quarter and 13.2 per cent year-on-year. Rental value growth slowed in the London market, although it still stands at 5.5 per cent over the quarter. Outside of London and the South East, there was also strong growth throughout most of Scotland. Hillier Parker hope this signals the turnaround in the Scottish market, which was still showing falling rents earlier this year.

The Industrial sector continues to show steady growth. Over half the sample has shown some, often moderate growth year-on-year, with only one location showing a fall.

Charles Follows, Head of Investment Research at Hillier Parker, comments: "The key issues are strength and polarisation, with growth concentrated on quality offices in the largest and strongest centres, particularly in London and the South East.

"Between 20 per cent and 25 per cent of locations still have rental values of below five years ago, which means that there may be growth potential in a number of these locations. Careful stock selection is essential if investors are to maximise returns.

"We anticipate that during the next year or so the office market will remain dominant because of the strength of service sector."

All enquiries contact Charles Follows, HILLIER PARKER. Tel: 0171 629 7666; Melissa Hubbard/Paul Desmond, Tavistock Communications. Tel: 0171 600 2288.