Commercial property values in the UK fell for the first time in
over two years as the Eurozone debt crisis and uncertainty
regarding a double dip recession threatened to hurt retail
assets.

The average value of retail space, office space and warehouse space declined 0.02 per cent in
November from the previous month, according to data from Investment
Property Databank (IPD) Ltd.

Malcolm Hunt, IPD's UK and Ireland client services director,
said: "Deep uncertainty about the potential of the UK to avoid
recession next year is now finding its way into property
values."

The negative capital growth for last month was driven by
declines in retail space, say IPD. The overall decline was driven
by a 0.4 per cent drop for stores outside London.

However, overall figures over the last 12 months reveal prices
rose 1.6 per cent across the board in the year to November
30th which may provide some form of encouragement for
landlords.

The outlook for commercial property values looks particularly
grim for the first half of next year however. Michael Marx, chief
executive officer for Development Securities Plc, predicts values
will fall by as much as 5 per cent, while a possible improvement in
the second half of the year may leave values little changed to just
2.5 per cent down for 2012.

Tony Key, professor or real estate economics at City University,
London, believes next year's rental performance will rely much on
the nation's economic growth.

"In a normal cyclical recovery we would have seen rents moving
on from zero about the middle of this year, just edging up and
oozing into 1 to 2 percent growth," he said.

"You can write that off across the board [if forecasts of almost
no economic growth in 2012 are accurate]."

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