For the data behind the commentary, download our latest UK Investment Report.
STEADY STATE
Yields remain stable, with no movement whatsoever across the 45 prime markets we track. That leaves us with just three markets where have seen a change in the last quarter.
MSCI Monthly Total Returns came in at 0.6% - broadly where they have been during the course of 2025 so far. This continues to be driven by income, with just 0.1% capital growth, and -0.2% yield impact driving returns during July.
Once again, the star performers came from the retail sector – high street retail saw total returns of 1.2% for the month, leaving the subsector at 7.9% for the year. Close behind was Supermarkets which saw 1.1% monthly returns, taking annual total returns to 9.5%. All sub-sectors were positive during the month, with South East offices at 0.1%.
The only way is up?
Uncertainty in the macroeconomic environment is weighing on investment decision making, with the most recent bond volatility another question market for investors looking at real estate.Whilst at present, we are not expecting to see a significant increase in liquidity, there are pockets of strong investor interest. Notable examples include the surge in interest for Single Family Housing, and operational deals in the healthcare sector, while the diversity of demand for logistics and industrial assets remains. Investor interest for offices continues to increase, with a number of new or returning investors in the markets. For more information, including on the interest rate decision see our Economy and Housing Marketbeat.
