Italian commercial property capital growth finally fell into negative territory, by -2.5%, in the six months to the end of December 2008, according to the IPD Italian Biannual Property Index. The IPD said that after posting flat growth for the first half of last year, the delayed effects of the credit crunch had, at last, started to show through.
Italian commercial property capital growth finally fell into negative territory, by -2.5%, in the six months to the end of December 2008, according to the IPD Italian Biannual Property Index. The IPD said that after posting flat growth for the first half of last year, the delayed effects of the credit crunch had, at last, started to show through.
The six-monthly IPD Index revealed total returns managed to stay in positive territory by the smallest of margins, returning 10 basis points. This, for the second-successive half-yearly period, is entirely attributable to resilient income returns.
Over the six-month period under review, the most substantial falls in capital growth were in the retail sector, at -4.3%. In the two years of the bi-annual indices, growth has slowed in the sector for each successive half-yearly period, posting negative capital returns in both halves of 2008. By comparison offices and industrial, which maintained positive growth in the first half of last year, both fell by -1.6% in the second half of 2008.
Luigi Pischedda, IPD's Country Manager for Italy, said: 'Like several other Continental European countries, including the Nordic countries, Portugal and Germany, we are starting to see a correction in commercial property capital values after something of a delayed reaction to the credit crunch.'
