December dip in commercial property values

The plight of the commercial property sector took another negative turn as prices dipped last month, new research has shown.

According to a report by CB Richard Ellis, total returns in December were -3.9 per cent, while values in the fourth quarter of 2007 took a 10.3 per cent tumble.

Michael Brodtman, executive director of the company, revealed his belief that the sector could be set for a further drop in value, at least in the short-term.

He said: "It points to a rather challenging start to the year with the prospect of further outward yield adjustments compounded by a weaker occupier outlook, which would translate into more negative monthly returns in the near term."

Meanwhile, according to a report by Savills, the number of new commercial property builds fell in December.

The study also showed that developers were pessimistic about an increase in regenerations in the first quarter of 2008.