Commercial property values may soon be on the rebound with data indicating early signs of recovery following last year’s bruising price correction – but not for all real estate asset classes.
Earlier this week, MSCI’s monthly commercial property index revealed that values had nudged up 0.27 per cent in March, the first increase since June last year. The data analysis firm said the fraction of a percentage rise was led by “an increase in values for residential, industrial and retail property”, but it added that office values were still falling as the asset class “comes under pressure from hybrid working trends and heightened risk of obsolescence”.
MSCI said that capital values fell much faster during this most recent downturn than in 2008 or the late 80s – something which several experts have pinned on a change in valuation methods. It added that the result of this has been a much shorter downturn this time around “as it stands”.