Real-estate investments by pension funds and other big investors
lost a record 11% of their value in the fourth quarter of 2008,
according to preliminary data from NCREIF.
But market participants said that values are almost certain to fall
further, highlighting a debate over how property investments should be
appraised and how appraisal techniques affect the real-estate market.
In the UK, where appraisers have been much more aggressive in
marking down property values, some investors said the commercial
real-estate market is showing signs of restarting.
Ric Lewis, CIO for AEW Europe, a real-estate
asset manager that is a subsidiary of French bank Natixis SA, said
property prices in the UK are "not market-clearing yet, but close."
AEW closed a $95 million acquisition of an industrial
property in England this month, according to Real Capital
Analytics, and he said AEW Europe is getting close to doing two more
deals in the UK.
Data collected by RCA show that real-estate transaction volume in
the UK dropped an estimated 58% in 2008 from the year before, to
$46.6 billion. In the US, transaction volume fell 74% in 2008, to
$134 billion.