Consensus forecasts for total returns and rental growth across the UK commercial property market have been significantly downgraded for the next two years, writes Daniel Thomas .

The consensus survey by the Investment Property Forum, which covers advisers, fund managers and brokers, is now predicting a -11.3 per cent return from commercial property in 2009, more than double the -5.3 per cent return predicted in the same survey last quarter.

Capital values are set to fall 17.9 per cent this year, with rental values expected to decline by 10.3 per cent. This extends further the downward revisions at the end of 2008.

The consensus remains that 2009 will see the bottom of the market, however, with a recovery beginning through 2010.

There has been a deterioration in forecasts for 2010 – with expected total returns down from 6.2 per cent to 4.2 per cent – but so far the expectation remains for a positive result for all sectors. Capital value growth is forecast to remain in negative territory for 2010 but the decline is expected to be less steep.

The first forecasts by the survey for 2011 suggest that there will be a sharp bounce back, however, with total returns predicted to drive upwards by 11.7 per cent, and a return to positive capital growth figure of 4.1 per cent.