CHICAGO, Feb. 19 /CNW/ - IPD today released the 2008 results for the ICREIM / IPD Canada Annual Property Index, which at the end of December 2008 covered C$96.5 billion of commercial real estate. The Index saw a total return for 2008 of just 3.7%, down sharply from the 15.8% recorded in 2007, and the lowest level since 1994.(1)

Despite the softening of investment yields, direct property still outperformed equities, which fell by -31.4% according to the MSCI Canada Index, and REITs which returned -39.3% according to the FTSE EPRA/NAREIT Index, but trailed bonds which returned 15.2%, as measured by the JP Morgan 7-10 Year Government Bond Index.

"Declines in property values account for the weaker returns recorded in 2008, with on average capital value write downs of 2.3%," said Doug Rowlands,Senior Manager at IPD.

Of the major sectors, Offices was the top performer for the third consecutive year with a total return of 7.6%, followed by Residential at 6.4% and Industrials at 2.3%. Retail returns turned modestly negative in 2008, at -0.1%.

Western Canada markets continued to outperform markets in Eastern Canada.

Edmonton once again took top spot among the major markets, although its return of 11.7% was down significantly from 29.8% in 2007. The other major markets all moved down into single-digit return territory or lower: Calgary (7.3%);Vancouver (7.0%); Ottawa (5.4%); Toronto (2.7%) and Montreal (0.3%).

Family property prices in the US in 20 major metropolitan areas fell by an average of 18.5% in 2008, according to the latest batch of statistics to be published.

The 20 city composite index from Standard & Poor's showed the decline from December 2007 to December 2008. It also showed a decline of 18.2% in the fourth quarter from the previous year.

Article from: www.newswire.ca