The European commercial property market ended 2008, one of the worst years on record for some territories, amid warnings that conditions could deteriorate even more this year.

The RICS predicted that the UK was just halfway through a slump of at least 50% from its peak in the summer of 2007 to a trough at the end of 2010 that would be worse than the downturns of the 1990s and 1970s.

The UK market has preceded the rest of Europe in the past, which means that many other European countries are likely to follow suit.

'The unholy trinity of a banking crisis, the bursting of an asset bubble and forecasts of a severe economic recession has reduced all asset prices worldwide,' said Alex Jeffrey of fund manager MGPA.

UK commercial property returns for 2008 are set to surpass the landmark losses recorded in 1990, according to IPD, the property data provider, with all property total returns at -18.2% over the 11 months to November 2008, compared with an inflation-adjusted return of -16.2 % almost 18 years ago.

Financial Times