The U.K. commercial property market dropped in January to its lowest level in more than two and a half years, due to weakening demand and the continued crisis from the European debt crisis.
According to a Reuters report, new research from the Investment Property Databank (IPD) showed the total return on commercial property was 0.4% in January, down from 0.5% in December 2011. This is the lowest level since June 2009. Commercial real estate values also fell last month, down 0.2%. The office, retail and warehouse property sectors registered weak returns, while retail rents were down in all parts of the country except in central London.
‘With so much uncertainty still surrounding the future of the U.K. and the euro zone, and reports indicating that the U.K. economy is falling back into recession, it's no surprise that demand from tenants remains lackluster across all sectors,’ says Phil Tily, IPD's managing director for the U.K. and Ireland.
