Property yields rose in the third quarter as the credit crunch hit the property sector, said a report from LaSalle Investment Management today.

In its UK Property Market Review the real estate investment manager said that investment trends were starting to reflect market sentiment with the £40.8bn total investment volume for the first nine months of the year down on the same period last year.

It said: ‘In the first nine months of the year, institutions, property companies and other investors have all been net disinvestors, leaving overseas investors as the only major positive contributor.

Total return
Reporting on the individual sectors LaSalle said in the year to September the total return for property was 3.4%. Offices were the best performing sector during the first nine months of the year with a return of 7% compared to the industrial sector which had 2.7% returns and 1.2% in the retail sector.

It said that the office sector was the only one to see a capital growth increase of 3.3% over the same period compared to a -1.4% in the industrial sector and a -2.2% in the retail sector.

LaSalle also reported that equities returned 12.2% in the last 12 months, compared to a property return of 7.2%. These were higher than both property equities at -12.0% and bonds at 1.2% for the same period.