The property market and the wider economy will worsen before they get better, according to speakers at this year's British Council for Offices (BCO) conference in Brussels.

In a downbeat plenary session, speakers Ian Coull, chief executive of Segro, John Plender, chairman of Quintain and Noel Manns, principal and founder of Europa Capital, agreed that the situation would remain poor for the foreseeable future, but it was not Armageddon.

Plender said: 'Anyone who claims to know what is going on in the credit markets at the moment is either a knave or a fool.

'It will get worse before it gets better. The damage from the credit squeeze will be felt increasingly in the real economy. There will be two to five years of below average growth which is an unhappy situation for property. A lot of highly leveraged companies will go bust.

'But there will be no loss decade in the UK or the US. There is not a shortage of capital. Yields have moved out, but not yet enough to excite value buyers. It is about whether the big battalions of opportunity funds are going to come in this year or not.'

Manns said that there were some silver linings in the cloud, including the potential of short-term cheaper rents for occupiers and the return of German funds to investing in the UK.

Segro chief executive Ian Coull predicted that the prospect of European REIT’s is a distant one.

He said: 'I don't think there will be European REITs in my working lifetime, or my son's working lifetime, or my grandson's working lifetime. There will be more harmonisation likely in European REITs but there is no real prospect of a single European REIT.'