A recovery in regional property values during the closing months of 2013 helped commercial property returns hit 4.4 per cent in the fourth quarter, according to the latest data from IPD, boosting annual UK total returns to 10.5 per cent, the highest since 2010.

Improving business and consumer sentiment in core cities such as Manchester, Birmingham, Edinburgh and Leeds coupled with the continuing strength of London and the South East, helped capital values grow by 2.9 per cent during the last quarter and by 4.3 per cent for the year.

According to the IPD UK Quarterly Property Index, property performance outside London has been muted since the financial crisis, while London has prospered due its safe-haven status as investors moved money out of Europe under the threat of financial contagion.

As a result, since December 2010, commercial real estate values have risen by 26 per cent in Central London – but have fallen by 4 per cent in the rest of the UK. In contrast, the UK’s strong commercial property return in 2013 was more broadly-based.