Offices' values 'set to worsen'

Commercial property values will continue falling next year after losing nearly a third of their worth since the start of the credit crunch.

That is the verdict of property consultant Atisreal, which forecasts offices, shops and warehouses will lose another 9.7% in value in 2009 to add to the 7.7% decline last year and 22.3% fall this year, with the City struggling in particular.

Paul Griffiths, head of investment at Atisreal, said: "The City has suffered most with a fall of 35% since the top of the market but there is still demand for trophy buildings coming from overseas investors who have propped up the market.

"However, the high-profile collapse of several deals by German investors has brought this to a temporary standstill. The downturn will continue to be fairly nasty until mid-2009."

John Rhodes, valuations director at Atisreal, said the wider market will start to recover in 2010. "There will be no bounceback as previously hoped," he said.