The FTSE UK Commercial Property Index fell 1.44% in July 2008, after recording a 1.1% drop in the month earlier, bringing the total return over the last 12 months to -12.79%. The FTSE UK Commercial Property Capital Index experienced a net return of -1.83% in July, compared with -1.5% in June, returning -16.73% year-on-year.
The FTSE UK Commercial Property Index fell 1.44% in July 2008, after recording a 1.1% drop in the month earlier, bringing the total return over the last 12 months to -12.79%. The FTSE UK Commercial Property Capital Index experienced a net return of -1.83% in July, compared with -1.5% in June, returning -16.73% year-on-year.
According to market commentary from the FTSE Group, lack of debt-finance and a pessimistic outlook for rental values are all putting significant downward pressure on UK commercial property market sentiment. The commentary cites reports from property adviser Jones Lang LaSalle indicating further deterioration of prospects for UK commercial property rental and capital values.
The FTSE Group said that gilts recovered from last quarter’s total returns of -3.6% (quarter-on-quarter), delivering a monthly total return of 2.4% in July 2008 and +0.1% from the beginning of the year. However, within riskier asset classes, it noted that commercial property had outperformed other asset classes in the UK. Since the beginning of 2008, the FTSE ALL UK Commercial Property Index has delivered a -8.90%, compared with -14.1% for the FTSE 100 Index, -18.8% for the FTSE EPRA/NAREIT Index (UK only) and an indicative -9.6% for the FTSE Hedge.
