British commercial property market witnesses wretchedness

It is no longer becoming but is already evident that the worldwide downturn has been plaguing the global property market. But among it there are also disparities and it seems that there is hardly anyone that can be compared with the commercial property market of UK. Well, this is not the individual discretion of this journalist but the available data is pointing to this grim scenario. The data published only on Thursday points towards this definitely and once again. According to the ready statistics, the British commercial property values plummeted in the month of December for 5.8 percent again and this took the deterioration of the market to 27.1 percent in 2008.

This is not all. According to the benchmark data from Investment Property Databank (IPD), that is considered and also applied as the basis of the property derivatives market of UK, the values have fallen 35.5 percent since their June 2007 summit. It should also be noted that the index registered a 5.7 percent drop in November. The sordid situation has been finely expressed by Ian Cullen, the director of IPD who said, “The peak-to-trough decline in values of more than 35 percent in only 18 months is totally without precedent.”

According to the consideration of IPD, the retail properties perceived the most exhorbitant reduction in value last year and there was the fall of 28 percent compared with 27.2 percent for offices. What’s more this decline increased in intensity in the month of December as stern trading conditions forced several retailers into administration. On the other hand the industrial property values faced a reduction of 25.5 per cent in the year 2008. Nevertheless what is most remarkable is that the rentals, which managed to retain a steadiness throughout the year of 2008, confirmed decline to a great extent near the end of the year.

Ian Cullen, said on this, “The pattern of the pressure on the market is beginning to change, with rental value decline now also contributing noticeably at least to office sector capital falls.”