All Property total return for the IPD CEE index was 0.5% for the 12 months ended in December 2008, compared with 14.2% the previous year. The top sector was retail with a total return of 2.5%, the worst-performing sector was industrial with -4.4%, while offices generated a return of 1.5%.
All Property total return for the IPD CEE index was 0.5% for the 12 months ended in December 2008, compared with 14.2% the previous year. The top sector was retail with a total return of 2.5%, the worst-performing sector was industrial with -4.4%, while offices generated a return of 1.5%.
The IPD all property capital growth dropped to -5.4% in 2008, from a positive 7.1 % in 2007, whilst income return remained relatively stable at 6.3%, a reduction by 40 basis points from 6.7% in 2007. All property yields rose by 60 basis points to 7.2% in 2008, from 6.6% the previous year.
Nassos Manginas, Director for Central & Eastern Europe at IPD, said: 'In 2008, we saw a sharp correction in total returns of the CEE index driven primarily by negative capital growth across all sectors. After three years of positive capital growth in the region and in conjunction with the overall deteriorating economic conditions, the CEE real estate region did not manage to escape the downward trend in capital values.'
The industrial and office sectors have been most affected by capital depreciation with the retail sector suffering less. Overall, compounded capital growth over the last four years was positive, at 4.3%, while income return was 6.9%.
The IPD CEE Annual Property Index is based on a sample of 395 properties from 28 portfolios covering EUR 10.6 bn at the end of December 2008.
