(Reuters) - UK commercial property values slipped in September but at a slower pace than in July and August, a closely-watched index showed, suggesting concerns about the impact of Britain's vote to leave the European Union are easing.
Overall property values for UK commercial assets fell 0.21 percent in September, following a 0.65 percent fall in August, and 2.8 percent fall in July, the IPD real estate index, compiled by MSCI, showed on Monday.
Britain's 900 billion pound ($1.12 trillion) commercial property market was one of the biggest victims of the turmoil that followed the June referendum, and at one point over 18 billion pounds worth of commercial property funds were suspended.
Commercial property deal activity level has since picked up, as a steep drop in sterling attracts overseas buyers and local investors remain unfazed by any potential fallout from Brexit.
Most funds have reopened and valuers have dropped Brexit uncertainty clauses from most of their property valuation reports.
The clause stated there was a reduced probability that valuers' opinions of the worth of a UK property would exactly coincide with the price its potential sale fetched.
Valuer Jones Lang LaSalle told Reuters it had removed the clause as transaction levels picked up, while Savills (LON:SVS) said in an email it was using the clause for a more limited group of commercial asset types than before.
Total returns from UK commercial property rose 0.2 percent in September, compared with a drop of 0.1 percent in August, MSCI data showed. Total return is often used to compare different assets as it takes into account their value as well as rental returns.
The IPD real estate index is one of Britain's most widely watched commercial real estate data surveys, and tracks about 10.5 percent of the professionally managed UK property across all sectors, including retail and office property.
The September index was based on data from 3,258 property investments with a total capital value of 45.8 billion pounds, MSCI said.