Uniformity unwinds in direct and indirect markets, says IPD

IPD published the following indices and formal statements over the period under review:

• IPD Japan Monthly Indicator – September 2009
• IPD UK Monthly Index – December 2009
• IPD UK PPFI – Q4 2009
• IPD Australia PPFI – December 2009
• IPD Ireland Quarterly Index – Q4 2009
• IPD Global Derivatives Trading Volumes – Q4 2009

UK and Ireland: fundamentals diverge over 2009 British and Irish commercial real estate markets, two of the three mature property markets to be most severely re-priced since the credit crunch1, diverged from their aligned downward trend last year. While the UK delivered positive annual total returns of 2.2%, fuelled by an almost bullish cumulative 8.8% rebound in capital growth over the latter part of 2009, Irish annual returns remained negative each quarter delivering -23.3% over the year.

The ray of light, as far as Irish investors were concerned, was the easing in capital depreciation across all sectors in the final quarter, despite a weakening in rental growth and continued yield expansion. Irish capital growth, at -4.9%, was the shallowest depreciation since Q1 2008.

As the chart below illustrates, the UK market experienced its first quarterly capital depreciation six months ahead of Ireland, while Britain’s return to positive capital growth began in August 2009. Notwithstanding the five-month recovery, capital values in the UK are still down by -39.2% from their June 2007 high to the end of 2009.

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source : IPD