Commercial property values fell by 27.1% in 2008, according to IPD, the leading index provider.

Values fell by a record 5.8% in December, meaning the overall decline for the final three months of the year was 15%.

The commercial property market has been ravaged by the reduced available of credit and falling demand for new space as the economic downturn leads to businesses collapsing or downsizing.

A recent report by investment bank Close Brothers warned that UK banks could be forced into another government bail-out because of the amount they have lent to the troubled commercial property sector.

From the peak of the market in July 2007, values have now fallen 35.5%, described by the IPD as 'totally without precedent'.

Daily Telegraph