Learning the hard way

What are the lessons that can be gleaned from the downturn in the UK commercial property market?

Commercial property is undergoing a sharp downturn. We are currently experiencing the second-round effects, as the deteriorating economy has started to impact occupiers of retail, office and industrial premises. Many markets are experiencing increasing vacancy levels and falling rental values. Combined with rising yields, reflecting investors' re-pricing of real estate to reflect revised views on risk, liquidity and future rental growth, total returns in most countries have been negative. While some of the downturn in performance can legitimately be regarded as being caused by an economi...