By Elizabeth Howcroft and Carolyn Cohn
LONDON (Reuters) – UK property investment returns fell 10.4% in 2022, in a sharp turnaround from gains of 20% in 2021, MSCI’s monthly UK property index showed on Tuesday.
Much of the losses came in the second half of the year, which saw returns of -18%, the index showed. Industrial properties make up 41.1% of the index, with office (26.3%) and retail (21.5%) the next biggest groups.
Britain’s commercial real estate market has come under pressure from high inflation and economic uncertainty.
Several open-ended property funds have put restrictions on withdrawals to prevent a stampede for the exits.
Federated Hermes has deferred redemptions since August on the FH Property Unit Trust “to allow orderly asset sales”, a spokesperson for the asset manager told Reuters, bringing property fund assets facing curbs to more than 16 billion pounds ($19.65 billion).
Earlier in January, an index published by CBRE showed UK commercial property values decreased by 13.3% as a whole in 2022, and annual total returns were down 9.1%.
(Reporting by Carolyn Cohn; Editing by Nick Macfie)
