Capital growth in all US property sectors negative for 2008 and first quarter of 2009

Capital growth in the US property market has suffered across the nation with every sector seeing a negative performance, according to the first ever annual index and quarterly indicator.

Capital growth was down 12.2% in 2008 and the US all property income return saw an overall total of -7.4%, says the data Investment Property Databank, the global real estate performance analysis and benchmarking specialist.

The US Quarterly Indicator, which monitors quarterly movements in US commercial real estate value trends and returns, revealed that capital growth was down 10.5% for the first quarter of 2009. And over the same three month period, US all property income return was 1.4%, contributing to an overall total return of -9.2%.

The office property sector fared the worst, with capital growth of -12.8% in 2008. The residential sector was down 12.2% while the industrial sector and retail sector saw declines of 11.7% and 11.4%, respectively.

On a regional level, Western states saw the steepest decline with a capital growth down 13.0% for the 12 months to the end of December 2008. Capital growth results were similarly negative for the East, South and Midwest, at -12.3%, -11.1% and 11.0%, respectively.

'A clear feature of these US results is the apparent synchronization in the downside performance. What ever manner in which we analyze the data, either across regions or sector, market values have been written down at broadly the same rate,' said Simon Fairchild, Managing Director at IPD US.

'There are small differences, of course, but they are relatively minor compared with historic norms,' he added.

Data from the US Annual Index will be fed into the IPD Global Annual Property Index which includes real estate performance data from the 25 most mature national real estate markets and covering over 50,000 assets worth $1.4 trillion.

The results of the IPD Global Annual Property Index 2008 will be presented to delegates at this year's IPD European Property Investment Conference in Barcelona on June 4th. The first of their kind, these results will illustrate the extent to which all major global property markets moved in unison during the global recession last year.