Office capital values in the City of London hit after the Brexit vote

Helen Cahill
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Property in the City of London has been dented by the Brexit vote (Source: Getty)

Commercial property capital values fell in July due to heightened uncertainty after the Brexit vote, and offices in the City of London were the worst hit.

Capital values fell by 3.3 per cent, according to CBRE's monthly index, with the value of offices in the City of London falling by 6.1 per cent.

Read more: Commercial and City property prices crumble following the Brexit vote

Retail sector capital values were down by 3.6 per cent and industrial property values fell by 2.2 per cent, reflecting a weak supply and high demand in the industrial sector, CBRE said.

The figures come after it emerged that investors have been pulling out of commercial property. Retail investors withdrew £3.5bn from funds in the month of the EU referendum, according to the Investment Association, "eclipsing" outflows that occurred during the financial crisis.

Miles Gibson, head of research at CBRE, said: "Capital value growth was always expected to falter at some point during 2016, as global economic uncertainty cast doubt on the likelihood of the strong growth seen in previous years persisting for much longer.

Read more: Investors are getting cold feet about UK commercial property since Brexit

"The Brexit vote has now crystallised that expectation, though it is not the only driver of it."

Rental values across the UK's commercial property market were flat, with growth falling to zero from 0.2 per cent the month before.

CBRE said the fall came from shops in the retail sector; rental values fell by 0.3 per cent overall, and 0.6 per cent outside the South East.