Commercial property valuations fall at fastest rate since Brexit

UK commercial property market valuations are falling at their fastest pace since the Brexit vote and dealmaking is stuttering to a halt, according to MSCI. The index provider’s findings are an early indication that higher interest rates could tip the market into a prolonged downturn. MSCI said UK commercial property values fell by 2.6% last month, the largest monthly fall since July 2016. “It is a fairly gloomy outlook. There is clearly a great degree of uncertainty in the market at the moment,” said Tom Leahy, head of real assets research for Europe, the Middle East and Asia at MSCI. Additionally, the attractiveness of property has also diminished as bond yields have risen. One head of real estate at a large bank said: “Why would anyone bother buying commercial property if gilts remain above 5%?” The FT (£)