Over this two-year period, the nature of this property recession has shifted from a yield-driven downturn – all property initial yields have moved out from 4.6% to 7.9% – to a deepening negative rental cycle, particularly over the six months to the end of June 2009.
Yield impact, which measures the influence yield movements have on capital values, has followed a correlated "double-dip" pattern, aligned with the two distinct financial market shocks.
At the end of June, the yield impact had retreated to just -0.19% – the smallest monthly figure over the two-year period.
By contrast the UK rental value cycle continues to deteriorate, by -0.9% in June, which has picked up momentum since last autumn caused by rising City and West End office vacancies as well as the collapse into administration of Woolworth’s and MFI in the Retail sector.
Ian Cullen, co-founding director at IPD said: "June marked the second anniversary of continuously falling commercial property values in a uniquely painful way – by being the first month in 24 in which falling occupier demand, rather than investor diffidence, played the lead role in driving capital decline."
Have your say on this story using the comment section below