The total value of all UK commercial property fell 4.6% from £926bn in 2015 to £883bn in 2016, according to a new report from the Property Industry Alliance (PIA).
The decrease occurred in the months following the EU referendum.
At £883bn, this is the equivalent of around 40% of the value of both the UK stock market and UK government gilts.
PIA chair Bill Hughes, head of real assets at L&G, said: “Overall, commercial property still accounts for about 10% of the UK’s net wealth, similar to what was reported by the PIA last year.”
The PIA’s report revealed commercial property accounts for 13% of the value of all buildings in the UK, worth almost £7trn.
Retail and offices are the two largest commercial property sub-sectors, accounting for 38% and 31% of the industry’s total value respectively. Industrials come in third place – expanding in 2016 due to increasing appetite for logistics centres from internet retailers.
Hughes added: “This report demonstrates that, despite the political uncertainties, the commercial property industry continues to contribute strongly to the UK economy in many ways. It finances and constructs new buildings. It invests in and manages the accommodation needs of retailers, businesses, distributors, manufacturers, hoteliers and many parts of the public sector. It also maintains these buildings and facilitates the buying, selling and letting of such property on behalf of owners. In total, these activities directly contributed about £63 billion to the economy in 2016 – representing 3.7% of the UK’s Gross Value Added.”