UK Commercial Property Values Fall

Source : The Business Times, February 12, 2009

(LONDON) UK commercial property prices fell 3.5 per cent in January, continuing their decline after the market fell 26.8 per cent in 2008, the world's biggest property broker CB Richard Ellis (CBRE) said on Tuesday.

While January's fall in value was not as sharp as the 4.9 per cent drop in December, the decline in rents accelerated slightly to minus 0.9 per cent, according to the CB Richard Ellis Monthly Index.

'January's results were marked by an easing of the negative impact of higher yields, but a pick-up in the rate of rental falls,' said Peter Damesick, head of UK research at CBRE. 'This combination is likely to carry on, with rents continuing their downward movement in the coming months.'

CBRE, one of the biggest contributors of data to benchmark index compiler Investment Property Databank, said property values are now 37.8 per cent below their peak in mid-2007.

Total returns, which comprise rental returns and capital growth, were minus 2.8 per cent in January, and minus 31.6 per cent from their mid-2007 peak, CBRE said. -- Reuters