DTZ expects further fall in UK commercial property values

Global real estate advisers DTZ expects to see a further fall in UK commercial property values this year, following an 18 per cent drop on capital values since summer 2007.

The firm's Money into Property 2008 report anticipates a decrease of at least another five per cent in the second half of 2008.

It says the London city office market is particularly vulnerable, with rents predicted to fall by 25 per cent to 2009.

Robert Peto, DTZ’s UK and Ireland chairman, comments: “With prospects for capital growth limited, investor focus has returned to occupier fundamentals.

"In the UK and US, a 'double dip' in investment markets remains a risk given the vulnerability of occupier markets to a weak economic outlook."

During the first quarter of the year transactions appeared to stabilise, standing at £7 billion, according to the report.

That figure is 42 per cent down on the same period the year before.

DTZ believes the worst of the first phase of the sub-prime crisis may be over, but adds that the credit crunch proper will continue well into next year.

The firm's more than 12,500 property professionals operate in 150 cities across the world, advising on the purchase, sale, leasing and acquisition of all types of commercial and residential real estate.

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