Commercial property has taken a hammering in the past few weeks, with valuations falling sharply since the collapse of Lehman Brothers. Prime industrial sector yields have moved up 50-100 basis points, and retail yields between 50 and 150 basis points.

Mickola Wilson, a director of Seven Dials Fund Management, predicts a drop in capital values of up to 30 per cent, from the June 2007 commercial property peak, by the end of the year. More pessimistic commentators expect the market to fall by up to 50 per cent before any recovery begins.