Property capital decline continues

Commercial property capital values continued to decline last month, new research has found.

According to the latest Investment Property Databank (IPD) UK Monthly Index, values dropped by 3.08 per cent during February, which means the total decline since the sector's peak in June 2007 now stands at -39.5 per cent.

Retail values fell for the third consecutive month, ahead of the likes of offices and industrials, while income returns remained at the level of 0.61 per cent recorded in January.

Ian Cullen, the co-founding director of IPD, said that the current re-pricing cycle is continuing to "run its course".

He added: "Perhaps the most notable feature of the February results, however, was the further weakening in office rental values, recording over three times the drop of the other major sectors."

Savills recently released figures claiming levels of development activity in the UK's commercial property sector appear to be slowing.