According to IPD’s Regeneration Index, The Regeneration All Property total return fell to -6% in 2007 compared with IPD’s UK All Property Index which was -3.4% in the same period. However, for the first time IPD looked at commercial development performance in regeneration areas and it returned +1.2% in 2007, significantly outperforming the IPD UK All Property Index.

Still, different property sectors in regeneration areas showed different patterns of returns. Office managed to retain its attraction in relative terms, returning -0.9% in regeneration areas compared to -0.5% in the broader UK index. In 2007, industrial properties in regeneration areas slightly underperformed, earning investors -4.4% compared with a -3.5% UK average. In the retail sector, retail warehouses and shopping centres in regeneration areas underperforming the retail warehouse and shopping centre averages returning -7.5% and -4.7% respectively.
Rebecca Graham, research analyst for IPD, told PIN: “ Over the medium and long-term, investments in regeneration areas have performed in line with the UK average. However new developments delivered stronger returns than retained investments in regeneration areas in the context of the UK’s serious market downturn in 2007.”