Total annual returns lose 0.9 percentage points in a month, while retail falls four points in a year

Japan's commercial property market has continued to plummet, new figures show.

Total returns for the 12 months to the end of July stood at 6.9%, down from 7.8% in June.

Separate figures for the first quarter of 2008 show that retail has suffered particularly badly, with returns down to 2.4% from 6.4% in the last quarter of 2007. Office returns fell by 3.1 percentage points to 8.4% over the same period.

The residential market fared slightly better, falling 1.3 percentage points to 4.3% in the first quarter of the year, down from 5.6% in the last three months of 2007.

Toshiro Nishioka, managing director at IPD Japan, said: “The latest monthly indicator to July 2008 shows that annualised total returns have been falling in recent months. It is clear that capital growth in the commercial sector has fallen between the quarters.

In particular, offices in local cities have seen negative capital growth for the first time since December 2004. The annualised three-month total return for retail is lower than that for residential for the first time in our data history.”