Savills has predicted that commercial property returns will see a fall of 10% this year before they begin to stabilise.

A spokesperson for the company said that recent figures from IPD suggesting that commercial property returns fell by 5.3 percent in December were too conservative, commenting that "there is a lack of evidence of quite how far prices have moved over the last 18 months".

He said that Savills sees further declines of 10% nationally this year, with certain investments already beginning to stabilise.

"The most sought-after investments - which generally are in long-term secure incomes, relatively small lot sites, so you can actually rate bank debt on it to buy it - have probably already started to stabilise and may even see some slight rises in prices as demand picks up," he remarked.

According to the IPD UK Monthly Index, December also brought the third monthly record drop in capital value, with a decline of 5.8 percent.

Meanwhile, the Royal Institution of Chartered Surveyors has predicted that commercial property capital values could see a plunge of 25% in the next two years, with a fall of 16% this year and 10% in 2010.