Commercial property values across the United Kingdom fell for a
seventh straight month in May 2012, with a decline of -0.5 per cent
- the steepest monthly decline since values began to fall in
November 2011.

Income return remained steady at 0.5 per cent, however this was
no longer sufficient in order to offset the negative capital
movements, according to the IPD UP Monthly Property Index.

The data reveals a cumulative decline of -1.6 per cent in the
last seven months and values are now -35.3% lower than values
pre-recession in 2007.

Phil Tily, managing director of IPD UK and Ireland, said: "Total
return has fallen to its lowest level since June 2009, which is
bleak reading for an industry still struggling with
re-financing.

"However, it's not all doom and gloom in the UK market. Despite
the uncertainty caused by wider economic factors, or perhaps
because of it, returns in London remain resilient. Values in the
City and West End office markets grew by 0.9 per cent and 0.3 per
cent respectively, and in Central London retails by 0.9 per
cent.

"The fact that London can continue to grow, even in such difficult
times, lends cheer to an otherwise challenged marketplace."

With the data broken down into sectors, it was retail space to let that saw the most
significant declines in value of -0.7 per cent, while office and
industrial space fell by -0.3 per cent each. Meanwhile rental
growth across all property levels remained flat.

There remains genuine concern as to whether the outcome of the
economic struggles in Greece and elsewhere in the Eurozone will
have a knock-on effect for the UK commercial property market.

"It remains to be seen whether the latest Greek election
results, will have a stabilising effect on the Eurozone, or whether
they will prolong the uncertainty," concluded Tily.

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