The value of the UK’s commercial real estate has fallen by £13bn in the past five years, according to a report published today.
Rental rates at Cardiff, Manchester and Liverpool experienced the sharpest falls since 2007, at 17% each.
At the same time, commercial real estate construction output has declined by 27% according to the report, commissioned by insurance company RSA.
The retail floor space vacancy rate for the UK is higher now than before the financial crisis up from almost 8% in the second quarter of 2007 to over 10% in the same quarter of 2012.
London’s retail markets bucked the trend, with rental values rising 7% and vacancy rates remaining a low 2%.
Paul Greensmith, director of risk managed business for global specialty lines at RSA, said: “The UK’s commercial real estate sector has been hit hard by the recession, and with commercial real estate growth so closely tied to GDP, it’s not surprising that we’ve seen such a sharp decline in output values since 2007.
“The retail sector is no exception to this. Despite the relative resilience of the Central London market, the trend of over-supply evident in retail property across the UK is likely to continue for some time.”