UK commercial property capital values decreased by 13.3% as a whole in 2022, and annual total returns were down 9.1%, according to the CBRE Monthly Index published on Monday.
CBRE’s index shows a sharp turnaround from 2021, when commercial property values rose 13.8% and returns rose 19.9%.
Property valuations in Britain’s $1.6 trillion commercial real estate sector have come under pressure in recent months from rising interest rates and economic uncertainty.
The industrial sector was particularly hard-hit, with capital values down 21% in 2022 and annual total returns of -18.1%, CBRE’s data showed.
Retail property capital values fell by 8.1% in 2022, while the office sector was down by 12.1%. Both also saw negative returns, of -2.1% and -8.3% respectively, CBRE said.
Following a surge in demand for redemptions, UK property funds managing around $18 billion worth of assets have introduced limits on investor withdrawals.