Global

While downturns may be hard to escape, diversification and income returns have in the past provided investors with some protection.

Variables such as age, location and property type can influence how much capex is required to operate an asset.

In 2001, office and retail accounted for 46 and 31 percent, respectively, of capital value in the MSCI Global Annual Property Index. However, now they account for less than two-thirds.

While retail had the lowest premium across the sectors in 2018, it was in line with its 20-year average, as were the office and residential sectors.

As interest rates have fallen, the discount rates on real estate cash flows have followed, helping to drive up asset values.

The highest total return was achieved by the industrial sector at 13.3 percent and the weakest total return was for retail at 2.9 percent.

The MSCI Global Annual Property Index found that commercial real estate achieved a total return of 7.4 percent in 2018.

Capital growth was positive in all the markets though in the U.K. it was just 0.6 percent.

Foreign currency denominated returns in the MSCI UK Monthly Property Index made during the post-event troughs significantly outperformed a GBP-denominated investment over similar periods.

As of the end of the third quarter 2018, asset values were 25 percent higher than their pre-recession peak, according to the MSCI U.S. Quarterly Property Index.

The downturn for commercial real estate did not set in until later than for residential real estate but once it did, the shock to commercial markets was much more pronounced.

This chart compares the return performance of seven countries where MSCI has quarterly property indexes for the 12 months ending September 2018.