Skip Ribbon Commands
Skip to main content

News Release

London

UK All-Property Total Returns in 2008 Lowest Ever Recorded

According to new Jones Lang LaSalle UK Property Index


London, 2 February – UK all-property total returns were the lowest ever recorded for a quarter at -12.8%, according to the latest Jones Lang LaSalle UK Property Index Q4 2008. This translated into annual total returns of -21.2% for 2008.  The fall in returns was driven by the sharp correction in pricing combined with the slowdown in rental growth which saw capital values dropping by -14.3% in Q4 2008 and -26.0% annually.

The equity markets also suffered as investor confidence drained and many major economies fell into recession and recorded an annual total return of -29.9%. Gilts were the best performing asset class in 2008 with positive returns of 13.6%, reflecting the current risk-averse nature of investors.

The office and the retail sectors recorded similar drops in capital values in Q4 2008, -14.5% and -14.7% respectively. Industrial capital values fell by -13.0%. This translated into annual returns of -21.9% for retail, -21.8% for offices and -18.7% for industrial.

The Jones Lang LaSalle “style index” showed that the secondary assets (value properties) continued to struggle with annual total returns of -22.7%. Capital values for secondary assets slipped further in Q4 by -15.2%, translating into a drop of -27.8% over the twelve months to December 2008. Total returns on prime assets (growth properties) were -12.4% for Q4 and -20.3% annually.  The worsening performance of all sectors and both prime and secondary assets illustrates both the scale and broad based nature of the pricing correction that occurred in Q4 2008.